Tue. Mar 31st, 2020

Transaction tax and Google rate are advanced to accounts

The finance minister and government spokesperson, Maria Jesus Montero, announced yesterday that the processing of new taxes negotiated con United We can, the so-called rate
Google and the one that taxes certain financial transactions, is separated from the bill of State’s general budgets. Montero implied that shortly the parliamentary tour of both tax figures will begin, which therefore take the lead.

Since approval

Minister Montero denies that the tax increase will be retroactive

The design of both assessments was already prepared for months with the rejected budgets of the year 2019, he recalled. Until a few days ago, it was not clear whether the approval of taxes on digital services and financial transactions was linked or not to that of the new accounts. And even Vice President Nadia Calviño noted the desirability of continuing her development in the European Union and the OECD. This decision to decouple them and accelerate their implementation takes place at a time when, in the best case, the Pedro Sánchez Executive hopes to move forward with this year’s budgets once the first part of the year is consumed. Which means that the rise in personal income tax, partnerships or the tax levied on diesel will not be noticed in public coffers until after the summer. It is urgent to boost revenues: as of January 1, public spending has been fattened by almost 4.7 billion euros due to the revaluation of pensions and the increase in the salary of officials.

(Anna Monell)

In the 2019 budget project, Montero estimated that these two new taxes would provide some 2,000 million euros, a figure that the Fiscal Authority considered excessively optimistic.

As for the rest of the measures that make up the tax increase agreement, which will be included in the budgets, the Minister of Finance denied that they will be adopted retroactively. Treasury sources explained that in the case of personal income tax the increase takes effect after approval, while in companies it is feasible to apply it to the entire year for the fractional payment. The absence of retroactivity implies a considerable reduction in the expected collection, because it would only correspond to a few months of this year.

The Minister of Finance also took it for granted that the State will end up taking care of a part of the expenses that ballast the Social Security accounts and that have long claimed experts and a good part of the political parties. These disbursements have to do, for example, with the staff of the public system or the benefit that workers receive for the birth of a child. In any case, it conditioned him to an agreement within the Toledo pact. The bulk of the public deficit falls to Social Security. In 2023, it is expected to drag 0.8% of GDP, of 0.9% overall.

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