The Government of Juan Manuel Moreno will maintain the reduction in most regional taxes in the Andalusian Budgets for 2025, but it will also increase and recover taxes that it had already eliminated. The reductions appear in the draft bill of the accounts that the Ministry of Finance brought to Parliament a month ago, but the increases do not. That tax burden is in the partial amendments of the Andalusian PP to its own Budget, which will correct the expected figure of income from the citizen’s pocket.
The popular ones propose raising the water fee by 30%, a rate that Moreno eliminated in 2022 – after the Andalusian elections – and reintroduced it with the same amount in 2023. When he announced its elimination, the Andalusian president quoted “the estimated savings for Andalusian families and companies in 140 million euros, around 40 euros per year in the water bill.”
In the last 12 months, since its reimplementation, the Board has collected 156.1 million from the water tax, which is the income forecast that appears in the Budget project for 2025. With the 30% increase proposed by the PP , if the amendment is approved without changes, collection would increase by 23.4 million (corresponding to the first half of next year), approaching 180 million, according to the estimate of the popular.
In 2022, the reductions in the regional section of personal income tax were around 200 million euros. It is the difference between what Andalusia and the State as a whole collected from a tax transferred at 50%, and on which the central government does not apply discounts. Those 200 million are the savings for Andalusians from the measure implemented by the Moreno Executive. The socialists assure that these savings will evaporate with the increase in the water tax.
Asked about this, the popular deputy and spokesman for the Treasury, Pablo Venzal, has made a little mess with the accounts, going so far as to estimate what Andalusians will pay after the 30% increase in the water fee below the savings he calculated President Moreno when he announced the elimination of this rate. “There are many variables, the referenced one, time passes, the rate is not the same now as before…”, Venzal has tried to explain.
The spokesperson for the Andalusian PP in Parliament, Toni Martín, has acknowledged that it is “a small sacrifice” that is asked of the Andalusians, and that the money raised will be used to improve the hydraulic infrastructure of Andalusia. The water fee is a final tax, so it must be reinvested in investments in water, against drought or for waste treatment.
Martín has directly linked this tax increase “to what happened in the DANA of Valencia”, ensuring that “all the income from the water fee will be transferred to Malaga, Almería or Seville [las provincias más afectadas por la gota fría en Andalucía] “From the solidarity of all Andalusians we go.” “It is a trial with a temporary vocation to improve hydraulic infrastructure in the face of what has happened. And we may reconsider it later,” he added.
What has not been clear is why a tax increase of this type does not appear directly in the draft Regional Budget for 2025 that was made public by the Minister of the Treasury, Carolina España, a month ago. Martín recalled that Moreno leads the Andalusian PP and also the Board and, in that sense, “they work in a coordinated manner.” But when asked if the party and the Government agreed to leave the tax increase out of the draft budget to introduce them later, via amendments, the popular party spokesperson did not clarify:
“I don’t see the doubt or the problem. Due to this rule of three, the PP would not present amendments to the Budgets. It seems very important to me after what happened in Valencia that it be made visible that this political force prioritizes, even above its party interests, the safety of Andalusians. “This is a small fiscal effort compared to many other reductions that are in the Budget,” he concluded.
Andalusia recovers the Wealth tax
The other reform in the Budget that the Andalusian PP introduces in its fifty amendments is the recovery of the Wealth Tax on large fortunes. In this case, it is a reaction to the central government’s decision to tax those fortunes after the Junta had eliminated it.
Moreno announced last year that Andalusians could choose between paying this state tax in Madrid or doing so in Andalusia, but that formula translated for the Board into a loss of more than 30% of the collection of these great fortunes. One of the PP amendments corrects that strategy – more political than economic – to force large assets – with incomes exceeding 3.7 million – to pay taxes in Andalusia. The estimated income is around 30 million.
The popular ones explain this measure in a very graphic way: “so that Pedro Sánchez keeps it, we keep it.” It is, in effect, a reaction by the Board to the recovery of the state tax on large fortunes that the Ministry of Finance implemented precisely to combat the fiscal dumping of the communities that had suppressed it to attract fiscal changes, such as Madrid and Andalusia. In practice, it means that the Moreno Executive once again collects taxes from the richest in this community.
Double rate increase in PP town councils
The increase in the water fee that the Andalusian Government will implement will follow the increase in rates that the city councils of the main capitals also governed by the PP already applied a year ago. The Board recovered the water tax a year ago, after the main corporations – such as Seville, Malaga or Córdoba – increased the municipal tax on water consumption.
One was generated. contradiction between different PP administrations, some eliminating a tax that others increased. Moreno always said that the suppression of the water fee would be temporary, although he left the door open to maintaining it. Citizens will notice the upcoming 30% increase in household and industrial consumption receipts in 2025.
This is not the only contradiction between the speech of the Andalusian PP, which champions the “massive reduction in taxes”, and the “underfinancing” that the Board denounces daily, demanding more resources from the central government. The water fee taxes urban consumption and translates into the autonomous community’s own income that is reused to finance the hydraulic infrastructure closest to citizens. When the Andalusian PP defended its elimination, it was simultaneously demanding a thousand euros more in financing from the Sánchez Executive to face the impact of the drought on the regional GDP.
Controversy also hovers over the water fee due to the lack of execution of the budget items allocated for the improvement of hydraulic infrastructures. In 2019, when the PP arrived at the Andalusian Government, it reported an unused remainder of 500 million euros. Moreno decides to use up that money first rather than continue charging the Andalusians in taxes. He announces that he will suppress it for a year, and that in that year he will invest what was collected from this tax, about 140 million, in hydraulic works.
But the level of execution of these investments in 2022 remained at 95.4 million, according to data from the Andalusian Executive, which continued to leave a remainder in the budget for hydraulic works close to 400 million. For a year now, the socialists have been denouncing the “lack of execution of works declared of general interest for Andalusia”, in the midst of the climate crisis due to the drought, while the Board defends that the entire remainder is “engaged in actions underway or already scheduled. ”
In 2023, according to figures from the Andalusian Executive, the level of execution of hydraulic infrastructure reached 155.7 million, 112% more than the allocated budget. In fiscal year 2024, the credit planned with the collection of the water fee was 305 million and in the month of October, the Board had spent 151.7 million, an execution level of 49.7%.
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