The project of the new public accounts includes the reduction of the discount from 85% to 40% for companies that are dedicated to renting homes
The Minister of Finance, María Jesús Montero, presented this Wednesday in the Congress of Deputies the draft Law on General State Budgets for 2022. It is the first step for the parliamentary processing of historical public accounts in terms of collection and spending aimed at consolidating the economic recovery with the arrival of European funds.
Historical also because they will take place in a year in which the Government expects the economy to grow “around 7%.” An overly optimistic view for some after the recent updates carried out by the INE and the IMF, which considers that Spanish GDP will grow by 5.7% this year and 6.4% the next.
Despite everything, the Government trusts that the economic rebound, together with the recovery of employment and consumption, will allow the collection figures to exceed 232,000 million euros in 2022, thanks to the improvement of all tax figures, especially in Personal Income Tax and VAT, in addition to the 400 million ‘extra’ that are expected to be collected by the imposition of the minimum rate of Companies at 15%, one of the measures agreed with United We Can to carry out the Budget project.
During the press conference, Montero has detailed that this minimum rate will be applied to companies with a turnover of more than 20 million euros, a figure that is still being negotiated within the framework of the OECD negotiations on this tax figure that it has suffered a very important decline in revenue terms in recent years.
Another of the ‘pacts’ of the Government partners to carry out the Budgets has been the future Housing Law, the details of which will be known in the coming days. However, the Budget project already includes a reduction from 85% to 40% in the tax credit for entities that are dedicated to renting housing.
The forecasts also include an increase in the collection of the tax on electricity of 400 million. Figure that was lowered in 2021 to mitigate the effects of rising light. In fact, the minister has made it clear that although the income forecast has been carried out with current legislation, “new fiscal decisions can be made” if it is considered necessary in the future, since the Budgets have room to do so.
“Spain is growing and creating jobs, a trend that will intensify next year and that will translate into an increase in tax collection.” “The collection forecasts are prudent, because in 2021 the collection will improve this 2021 by 10.8% with lower growth”. The increase would be 13.5% if non-tax income is taken into account.
Youth, pensioners and civil servants
If the forecasts are fulfilled, the collection record will serve to finance a historical expense that includes investments for 40,238 million euros, of which about 27,633 million will be borne by European funds.
Within the expenditure item, the social section will once again mark an all-time high (248,391 million euros, including European funds), with a good part of that cake destined for pensions (171,165 million) and, above all, young people , the epicenter of the new public accounts with measures such as the cultural bonus of 400 euros for those who turn 18 or the rental bonus of 250 euros.
In total, 12,550 million euros will be allocated in budget items for youth, 84.8% more. The Budgets incorporate increases for contributory pensions and for minimum and non-contributory pensions, which will benefit a total of 10 million pensioners. For the former, a rise above 2% is expected, after the revaluation with the CPI, while the minimum and non-contributory ones will rise by 3%, according to the Budget project.
For its part, the unemployment item has an allocation of 22,457 million euros, 10.2% less, given “the improvement in employment and the reduction of unemployment,” as explained by the Minister of Finance and Public Function, María Jesus Montero. This represents 4.89% of the total expenditure.
On the other hand, personnel expenses total 19,229 million euros, 4.2% of the expense, which includes the 2% rise in the salary of civil servants proposed by the Government for 2022.
Deficit and debt
With this spending forecast, controlling the deficit will also be key to adjusting the current figures to the 3% that Brussels will require again when the suspension of fiscal rules that it will maintain in 2022 expires to help recovery. In fact, the IMF estimates that the figure will remain above 4% at least until 2026. “Our commitment to budgetary stability will also allow the deficit to be cut in half in just two years and public debt will fall by four points in just two years. one year, ”Montero stressed during the presentation.
The management of public debt will also be key to managing the Budgets. Thus, in its section on financial liabilities, the Yellow Book that has been presented today in Congress provides for a decrease of close to 28% to 68,138 million euros. Something that, together with the expected economic growth, would cause debt over GDP to cut from the 119.5% expected for this year to 115.1% next. Estimates suggest that the interest that the State will have to pay for this debt will also be reduced slightly, by 4.7%, to 31,175 million euros.
((NEWS UNDER CONSTRUCTION))