The Government promises Brussels the biggest structural adjustment of the last six years and reduce spending to 40.9% of GDP

The Government promises Brussels the biggest structural adjustment of the last six years and reduce spending to 40.9% of GDP



The Government has sent to Brussels the draft budget plan with which it intends to approve public accounts for next year. Although it includes the measures agreed with Unidos Podemos, such as raising the Minimum Interprofessional Salary (SMI) to 900 euros per month, the final result of its calculations is that public spending will decrease 0.3 GDP points, from 41.2 % of GDP from 2018 to 40.9% in 2019. The Government assures the European Commission, that in a week it will give its verdict, that a structural adjustment (outside the economic cycle) of 0.4 percentage points of GDP is prepared ( about 5,000 million). "It will be the biggest structural adjustment made in our country in the last 6 years, which has even registered negative structural efforts in recent years," they say.

This containment of spending, according to the document published on Monday night, is due to the fact that nominal spending growth in these two years is below GDP growth (2.3% and 2.6% each year, one tenth of a percentage point). less than previously planned).

On the other hand, the ratio of public revenues to GDP would increase from 38.5% in 2018 to 39.1% of GDP in 2019, mainly due to new taxes.

In this regard, the Government states in the plan that "a set of tax measures has been announced, whose joint structural impact is estimated at 5,678 million euros." With the measures that affect Corporate Tax, it is expected to raise an additional 1,515 million euros; the creation of two new taxes, the Tax on Financial Transactions and the Tax on Certain Digital Services, will have an expected total impact of 2,050 million euros.

For its part, the increase in income tax for high incomes will contribute 328 million in 2019 and 332 in 2020; while the measures relating to VAT and Special Taxes for environmental reasons, will have an expected impact of 617.9 million. The increase in the Patrimony Tax has an expected impact of 339 million and measures to combat fraud, an estimated impact of 828 million additional in 2019.

The new tax measures contemplated in this annual budget plan will be included in three preliminary bills that will be discussed in the Council of Ministers in the coming weeks. Specifically, it deals with the draft laws against fraud and transposition of the Anti-circumvention Directive (ATAD), the creation of the Tax on certain digital services and the creation of the Tax on Financial Transactions. The rest of the new tax measures contemplated in this document will be included in the preliminary bill of the General State Budget for 2019, which will be discussed in a Council of Ministers at the end of November or the beginning of December.

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