The Valencian president announces a tax cut for all incomes of less than 60,000 euros, increases the amount to benefit from deductions to 30,000 euros, announces 100 euros for mortgages and free transport for those under 30
The Valencian Community joins the tax cuts. President Ximo Puig announced this Tuesday morning his proposal to reduce personal income tax on all incomes below 60,000 euros. A decision that has not taken long to receive a response from the Government. The Minister of Territorial Policy and spokesperson, Isabel Rodríguez, has avoided expressly answering whether or not the Executive agrees with the Valencian president’s decision to deflate the personal income tax rate for incomes below 60,000 euros. But in a generic way, he has asked for a “responsible speech” from all the Autonomous Communities because every time income is reduced “there is the debate about what to cut.”
Rodríguez has insisted that the Government’s fiscal policy is that of “social justice” so that this crisis “is not paid by the usual” and that will be, he said, the focus of the fiscal package that the Executive is preparing in order to that those who have more contribute more and that there are no “fiscal gifts” from the middle and working class to the richest.
President Ximo Puig already announced on September 5 that his government was working on “a tax reform against inflation to help the working class.” With this decision, he joins other governments in which the socialists are present, such as the Basque or the Navarrese, which are also applying reductions in Income Tax. In the Basque Country, the third personal income tax deflation in a year was announced last week, while in Navarra at the end of 2021 the adjustment of the inflation tax was also approved.
Other socialist governments are also considering applying reductions in personal income tax, such as the Canary Islands or Extremadura.
Last Friday, Ximo Puig transmitted to the President of the Government, Pedro Sánchez, a suggestion for the reform of the regional financing system: that in the distribution of State income, the fiscal effort made in each autonomous community should be taken into account. “If there are communities that seek fiscal disarmament, then that the fiscal effort counts when it comes to state income,” Puig said four days ago. With this suggestion, he was referring, fundamentally, to the abolition or reduction of the Wealth Tax that communities such as Andalusia, Murcia or Galicia are carrying out.
The movement has had the reaction of the Popular Party: «Ximo Puig, the Socialist Party of Euskadi and Podemos Madrid are committed to adjusting personal income tax to medium and low incomes as proposed by Feijóo. The Government must rectify (again) and help the Spanish to deal with inflation with personal income tax, VAT or both. But act now,” commented the main opposition party on its Twitter account.
In accordance with the tax reform designed by the Consell, and which will come into force in 2023, the amount exempt from taxation for all citizens will be increased by 10%. It is the maximum allowed by the regulations, the president has said, and “it will benefit all citizens.” Those who exceed 60,000 euros of income will maintain their tax effort in the reform as a whole, said Puig, who explained a new section of regional personal income tax, adapted to the current situation.
For this concept alone, income of €10,000 will save 21% (€94.5 per year), income of €20,000 will save 7.3% (117 euros), income of €30,000 will save 2.2% (67 euros), while those over 60,000 euros will maintain their tax effort. “This will improve the progressivity of the tax,” said the head of the Consell.
That, in terms of taxes, because the Consell has also put its hand to tax deductions. To this end, all tax deductions and rebates will be extended with the following measures: All deductions increase by 10%: (The tax deduction for children, for renting a home, the deduction for large or single-parent families, the deduction for work-life balance with family life, or the deduction for expenses in nursery or school for children under 3 years of age). But the income that allows taking advantage of the deductions is also increased. From now on, the income that can benefit from the deduction will go from 25,000 to 30,000 euros.
The measures announced by Puig will affect, as explained by the president, 97.4% of taxpayers and will directly benefit 1,344,000 Valencian taxpayers. Specifically, to all those who earn less than €60,000. “To the majority of society.”
This is how the president of the Generalitat, Ximo Puig, pronounced himself this Tuesday, during his speech in the general policy debate.
In addition, Puig has announced that the public transport of the Generalitat will be free for those under 30 years of age from October 9 to December 31 and a new deduction of 100 euros for individual income mortgages of up to 30,000 euros and for the joint taxation of 47,000 euros.
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