After months of being on the back burner, the tax issue made headlines last week. The leader of the southern Andalusia Region decided to eliminate the wealth tax and lower the income tax to attract wealthy taxpayers.
Juanma Moreno from the right-wing opposition Popular Party, (PP) boasted that while they were a tax haven, now they are the region with Spain’s second lowest taxes. Madrid is also held in his region by the PP.
Spain is one of the most decentralized countries in Western Europe. It is divided into 17 regions. The governments of these regions have significant autonomy and are responsible to manage the budget.
Moreno’s remarks triggered a flood of cuts from other PP-run regions, such as Murcia (which slashed the income tax) and Galicia (which is rolling back its wealth taxes).
“Welcome To Paradise”
The party’s rising star Isabel Diaz Ayuso was a big fan of the announcements.
“Welcome in paradise,” tweeted the champion of tax war who last year abolished 15 local levies.
The move has been criticized by Socialist Prime Minister Pedro Sanchez who has condemned it as economic populism ahead of regional elections in May and a general vote expected in late 2023.
This raises concerns about the possible impact on funding public services.
Nadia Calvino, Economy Minister was clear in her criticisms of these moves. She called them irresponsible, inconsistent, and destructive and demanded that they be reversed.
Maria Jesus Montero, Budget Minister, said it was dangerous to create “tax havens” in Spain.
Sanchez joined the fray, denouncing “tax gifts to minority” and pleading for “responsible fiscal policies”.
He said that tax reforms should be implemented to ensure that those with higher incomes contribute more to the government to build a stronger welfare system.
Kundan Goyal has 6+ years of experience in news editing and market research. He has helped businesses of all sizes make strategic decisions and predict future trends. Kundan only publishes content that will help them grow their sales and revenue. He publishes business news in many different categories to help industry’s learn more about any product.In his spare time, he enjoys cooking and listening music .
