April 18, 2021

The economic agenda of Sanchez, in the air

The economic agenda of Sanchez, in the air

The government crisis caused by the failure of the 2019 General State Budget project leaves a good part of the economic agenda of Pedro Sánchez. The rejection of the Catalan separatists to this year's public accounts (in addition to the PP and Citizens) will probably end up in anticipated general elections that will prevent the Socialist Executive from launching some of the tax measures and expenses he had in mind. The idea of ​​the Government was to apply a fiscal "ax" to the companies and the highest rents with which to pay for the sharp increase in expenditure contemplated in the Budgets, which will go ahead. However, the only option left to Sanchez would be to articulate these taxes through "decretazos" and then try to obtain their approval individually in Congress.

Specifically, three quarters of the tax hike would be paid by companies, which would be charged with 6,200 million euros more taxes, and now breathe, at least in part, relieved by the possibility that they will never see the light . Of course, the new taxes on financial transactions (the so-called "Tobin tax") and digital services ("Google rate") will remain in principle. When dealing with new tax figures they can not go within the Budgets, so their fall does not affect them. They were approved last month by the Council of Ministers, although they have not yet begun their parliamentary procedure. Between both taxes the Government expects to enter more than 2,000 million euros, although the Independent Authority of Fiscal Responsibility (AIReF) has significantly reduced its collection capacity.

In the air there is the imposition of a minimum rate of 15% on Corporate Tax of large companies, which would increase up to 18% for financial and hydrocarbon exploitation entities. It also postpones the rise of two points of income tax for labor income of more than 130,000 euros and four points for those of 300,000 euros. For savings income of more than 140,000 euros, taxation was increased by four points. Another of the controversial measures in suspense is the rise of diesel to equal its taxes to those of gasoline. This increase was going to be 670 million euros for drivers, with an average of 36 euros per year per vehicle. The Government also calculated another 339 million euros for the increase in the Patrimony Tax, although AIReF did not believe these figures either and raised the revenue by only eight million at best and zero at worst.

Neither will the measures that would entail a tax reduction, such as the reduction of Companies to 23% for companies that invoice less than one million euros or the lowering of VAT for feminine hygiene products, electronic books and veterinary services, be applied. .

Only the two newly created taxes, the financial transactions tax and the digital services tax are still processed, since a Budget law can not contain new tax figures. Both were approved in separate bills, but have not yet begun their parliamentary procedure, waiting for the Government to defend them before Congress. The rise in pensions, the minimum wage and the salaries of officials, all approved by decree-law, also escape from the rejected budget.


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