The president of the Generalitat Valenciana, the popular Carlos Mazón, adds to his demand from the central government of 31,000 million euros, the equivalent of an annual budget of the autonomy, another extraordinary item of great significance. To alleviate the effects of DANA, the head of the Consell demands from Pedro Sánchez a transfer of 3,000 million euros through the extraordinary Autonomous Liquidity Fund (FLA), a mechanism enabled annually to compensate for the deficit of underfinanced communities.
The regional leader has been especially vehement on this issue in recent weeks, warning of a risk of “collapse” of social services. The central government has not specified what the extraordinary financing mechanisms will be for next year, nor how it will compensate for the deficit of the underfinanced territories, which is why the Valencian president presses his demand. Mazón estimates that the deficit at the end of 2024 will be more than 3,000 million euros, 2% of GDP, and demands a “rectification and urgent mobilization” of mechanisms to finance those billions “that do not arrive with the system of financing, but which are essential for health, education and social services.”
Through a letter to President Sánchez, Mazón also asks for a singular deficit for the Valencian Community, the worst financed in Spain, that “the deviation from the 2024 objective” be covered 100%. However, while the Valencian leader makes these demands, he continues to promote his tax reductions and continues to promise more tax reductions, in addition to asking the central Executive that taxes in relation to the DANA not be paid in the province of Valencia. Neither taxes for new vehicles, nor taxation for public aid.
120 million less in Inheritances and Donations
During a year and a half of the legislature, the PP Consell, in collaboration with Vox, has suppressed or eliminated a dozen taxes. The first measure of the bipartite Executive, already broken, was the bonus of the inheritance and donation tax, which is paid by large estates, and which has an annual impact of close to 300 million euros; 10% of what the Executive now demands from the State. With the tax reduction for the rich, according to the latest data from the Tax Agency, Inheritance collection has fallen by 40% and stands at 179 million euros. The donation modality had an impact of 19 million euros in 2023 and this year it remains at 15 million euros, a 20% drop in recognized rights.
The Consell has also suspended four taxes before they come into force. The first was the tourist tax, which would constitute a fund to finance improvements in the sector, with a tax of between fifty cents and two euros per person per night, as decided by the municipality. Until October of this year they arrived in the Valencian Community 1.1 million international tourists. In some autonomous communities, this fee paid by tourists raises more than 200 million euros per year.
Last week the Executive approved a decree to eliminate the so-called green taxation, provided for in the climate change law: taxes on CO2 emissions from vehicles, emissions of polluting gases and large commercial establishments – which attract vehicles – are eliminated. -. It was a promise from the Valencian president that he made before businessmen in Barcelona, which he fulfills a week before they come into force. In addition, the regional income tax brackets have been touched upon and a battery of income deductions have been approved.
PP and Vox also promised to eliminate the Wealth tax, according to their Government agreement. This tax is paid by those who have more than one million euros of assets – not counting debts such as home mortgages – and collected more than 200 million euros in 2024, 0.9% more than the previous year. This year, Mazón promised a 60% reduction in the property transfer tax for agricultural properties and a 50% reduction in documented legal acts for large industrial projects in the general policy debate, held in September. These taxes are the ones that have the most weight in the regional collection, with 1,390 million for the first – overall – and 338 million for the second, according to what appears on the budget portal of the Generalitat.
The overall collection of the Generalitat’s coffers has grown by 6% this year, mainly due to taxes linked to the purchase and sale of real estate or land: property transfers and documented legal acts. It is difficult to estimate the impact of the tax reduction on young housing, which has been reduced from 8% to 6%, given that operations have increased at the end of the year – marked by the increase in purchases by foreigners and in cash, without mortgage loan. The tax on empty homes, which the Consell does not like either, has raised 7 million euros. Taxes on gambling have also increased: bingo, raffles and slot machines, quite symbolic in the context of uncertainty.
In a context of chronic underfinancing and a debt that does not stop growing, it seems inconsistent to demand billions of euros from the Executive when a substantial part of the collection is renounced and tax cuts continue to be promised, trusting the viability of the public coffers. to the real estate boom and economic projects that are about to materialize.
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