The Madrid Government gives the green light to deflate personal income tax with the support of Vox
The plenary session of the Assembly of Madrid has approved this Thursday, with the votes of PP and Vox, the deflation of the regional scale of the Income Tax on Physical Persons (IRPF), which will have its effects on next year’s income tax return. With this measure, approved by the single reading procedure -which shortens processing times and prevents the presentation of amendments and debate in committee-, it is intended to prevent taxpayers from paying more taxes if their salaries are increasedand thus maintain their purchasing power in a context of rising prices and inflation.
United We Can, More Madrid and PSOE have voted against of the measure and have lamented that the highest incomes will be the most favored. The deputy of United We Can Sun Sanchez has criticized that the deflation on the most frequent salary in Madrid, which is 23,000 euros, will only allow the taxpayer to save “26 euros a year”, and that the highest incomes will save “almost seven times more”. The deputy of More Madrid Eduardo Gutierrezfor its part, has questioned “the rush” of the Ayuso government to approve this measure by the single reading procedure, preventing “improvement” of the bill to limit the deflation of personal income tax to measured classes with incomes up to 35,000 or 40,000 euros.
the socialist deputy Fernando Fernandez Lara has considered it to be a “electoral pill” of Isabel Díaz Ayuso that it should be accompanied by a package of direct aid to all families and not “exclude many segments of the population”. According to data from the regional Executive, the measure will mean a savings of 200 million euros for Madrid taxpayers: 6.26% of the quota for a gross salary of 20,000 euros, 2.71% for a salary of 32,600 euros per year, and for a salary of 90,000 euros.
The Minister of Economy, Finance and Employment, Javier Fernandez-Lasquetty, of the PP, has highlighted that Madrid is the first community to approve the measure in 2022 so that the people of Madrid “do not have to pay more taxes”, in a context of rising prices and inflation of the current 7.3%. The Government of the Community of Madrid is committed to the deflation of personal income tax to modify all the regional rate brackets, which would make it jump from one tax rate to another and, therefore, would mean, according to the counselor, “a hidden rise in taxes” .
Likewise, he has criticized the fact that the central government “cheats with inflation” and raise taxes “through the back door”since thanks to this tax revenues have grown by 19%, 27,000 million euros more than in 2021. To establish the percentage on which the deflation will be made, the increase in the national ordinary salary cost of the second quarter will be taken as a reference of 2022, established at 4.1%, according to the Quarterly Labor Cost Survey prepared by the National Institute of Statistics (INE)
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