According to EsadeEcPol calculations, many taxpayers will avoid declaring after the tax adjustments approved by the Government
The sharp rise in inflation has created a real hole in the pockets of Spanish workers, who are suffering a notable loss of purchasing power with very limited wage increases compared to 8.4% inflation. Faced with opposition pressure, the government decided to continue without deflating personal income tax. That is, update the tax by eliminating the effects of price changes. A decision that, according to EsadeEcPol calculations, has allowed the Treasury to retain 9,000 million euros.
According to a report published this Tuesday by the institution, “if in 2022 personal income tax will have collected some 110,000 million euros, fully updating it to 8.4% inflation means giving up collecting some 9,000 million euros, which is almost a point of GDP plus deficit’.
The second issue is that this amount of lower collection supposes, by definition, greater spending capacity for households, which feeds inflation. In other words, they indicate that in order to fully adapt the personal income tax to inflation, not only the sections must be touched, but practically all the elements of the tax.
It should be remembered that this tax figure is the main one within our tax system. And also one of the most complex, as evidenced by the latest reforms and modifications approved. For example, this year, incomes that do not exceed 15,000 euros are not required to make the declaration, compared to the 14,000 previously established.
With the previous regulations, 430 euros would have been withheld (43% of the excess over the old limit of 14,000 euros) and he would not have had to file a declaration either, unless he had a relevant second payer. But beware. Because if the taxpayer who earns 15,000 euros, for whatever reason, filed a return, then he would pay 387 euros.
A situation that would occur up to 21,200 euros, a figure from which the maximum withholding does not apply. “Obviously, if the taxpayer does not have the obligation to declare, and the withholding is less than the quota, he will not file a declaration,” they warn from Esade.
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