The Spanish government is aiming to increase its tax revenue by €3.14 billion in 2023 via several measures such as a wealth tax – albeit temporarily – and corporate and capital gains tax hikes.
This is according to Spain’s Budget Minister, Maria Jesus Montero.
The measures will come into effect next year, during a battle over tax, with leaders of certain regions unveiling reductions in some of the taxes they control.
The Unidas Podemos party has been driving for changes in taxation, including cuts on taxes for people with incomes of under €21,000 and also small and medium-sized businesses, Reuters reports. Savings for these taxpayers would total around €1.9 billion.
"We have to make this adjustment at this time to combat the effects of inflation... and there is the need to ask for a greater effort from those who are benefiting from energy prices and interest rates," Montero commented.
Although the two ruling parties in Spain have reached an agreement on taxes, they haven’t yet agreed on the 2023 budget.
Furthermore, the government will introduce a temporary wealth tax in 2023 and 2024, known as a "solidarity tax", which will impact around 23,000 people with assets of at least €3 million. The initiative is expected to raise €1.5 billion.
In addition, taxes on capital gains over €200,000 will be hiked, along with businesses with a minimum of €200 million in annual income, worth a further €2.43 billion in revenue, the Reuters report adds.
Spain is not required to comply with Brussels’ fiscal regulations due to the pandemic impact, yet its deficit target for next year is no more than 3.9% of GDP, and it forecasts to return to the 3% target by 2025.
Soaring inflation is threatening economic growth, however, it has resulted in a hike in tax revenues this year, predominantly because of VAT receipts.
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