The Government commits to Brussels to lower public spending and raise taxes in 2022


The Government has sent this Friday to the European Commission the 2022 Budget Plan in which it announces a reduction in public spending and a reform of the Spanish tax system “in such a way that it does not slow down the economic recovery, but allows tax revenues to be progressively closer to the average of the Member States, to protect the welfare state, as well as face the structural deficit of our country “.


Budgets point to a record collection with VAT and personal income tax at record highs

Budgets point to a record collection with VAT and personal income tax at record highs

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The Executive maintains its forecast that the country’s gross domestic product (GDP) will expand 6.5% this year and 7.5% in 2022.

The Government reminds Brussels that it launched a committee of experts for tax reform that will publish its conclusions in February 2022, with the aim of achieving “fiscal consolidation, legal certainty, simplification and modernization of the system, empowerment of taxation in under-taxed areas “.

The Executive explains that with this tax reform “it is necessary to improve the collection and efficiency of the tax system through the widening of the tax bases reduced by the numerous exemptions and deductions, evaluating whether the existing tax benefits achieve the objectives for which they were created. , or if they should be revised. Likewise, the current tax figures should be analyzed in depth to adapt them to the economic context, and advance in the incorporation of new taxes in accordance with the most recent trends “, in reference to ecological and digital taxes.

Regarding public spending, the document indicates that while in 2021 it grew by 1.1%, “although in 2022 it would register a negative growth of -1.8%”, with the argument that “the projected fall in nominal public spending Net computable is due both to the evolution of the total expenditure of the Public Administrations and to other factors, among which it is worth highlighting the increase in discretionary income measures planned for 2022 “.

In this way, the Budget Plan foresees that its weight on GDP “will fall to 44.7% in 2022 from the 49.6% expected in 2021 and the 52.4% reached in 2020 due to the sharp decline in the economy that It caused the pandemic and the measures to support families and companies that the Government adopted to mitigate the consequences of the recession. ”

The 2022 Budget Plan states that the total income of the Public Administrations as a whole will account for 39.8% of GDP. In terms of volume, revenues will amount to 522,264 million euros, which represents a growth of 4.6%. To the extent that the growth of the economy will be higher than the collection, the ratio of income to GDP is reduced compared to 2021, when it will stand at 41.3%.

With these measures, the Executive of Pedro S├ínchez tries to maintain the commitment with Brussels “of budgetary stability, despite the fact that the suspension of fiscal rules in Spain persists, in line with the decision of the European Commission to keep the safeguard clause active. in order to give the States scope to continue with their policies to support the economy until the recovery takes hold.

In the Budget Plan it was pointed out that “from the 11% deficit in 2020, it is expected that in 2021 it will fall to 8.4%, and up to 5% in 2022”, a reduction that will continue in 2023 and 2024, exercises in which will drop to 4% and 3.2%, respectively.

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