Tax war in communities: which ones are dropping them

These tax cuts, initially promoted by the PP, criticism from some socialist leadersThe president of the Valencian Community, Ximo Puig, has announced that he will increase the tax-free amount for all Valencians by 10%, the “maximum allowed by the norm.” There will also be a new regional personal income tax rate for 2022, with a 10% increase in “all tax deductions and reductions”, along with new inflation-adjusted sections.

Puig stressed that these measures are aimed at taxpayers earning less than 60,000 euros; ie 1.34 million Valencians and 97.4% of the total. They will be applied on the 2022 income tax return.

The head of Xunta de Galicia, Alfonso Rueda, suggested that in addition to the personal income tax falling from 9.4% to 9% in the regional segment, it will suffer a new income decline of up to 35,000 euros. From 1 January 2022. This, according to estimates, will serve to save each Galician an average of 450 euros, which corresponds to a total of 46 million euros.

All this adds up to other deductions that were previously subject to personal income tax, such as families with two children under 25; and that the first tranche of this tax will decrease from 9.4% to 9%.

Latter, Various autonomies managed by PPCountries like Galicia, Madrid, Andalusia or Murcia have already announced their intentions to more or less deflate personal income tax.

Also, the Basque Country, where PNV shares a Government with Euskadi’s PSOE, announced that it will return as it was in July to deflate all parts of the IRPF rate. Added to the 1.5% done at the beginning of the year, this would mean a total deflation of 5.5% for 2023.

In Andalusia, a deflation of the first three sections of the regional IRPF rate by 4.3% will affect all taxpayers, but will benefit the 82% of taxpayers, especially in the first three sections. The measure will take effect retroactively until January 1, 2022 and will be reflected in the personal income tax return filed next year.

The Board justifies deflation to avoid a wage increase that in no case can compensate for the sharp rise in inflation, means a higher taxation for the taxpayer and keeping the portion of income allocated to meeting basic needs out of taxation.

Considering that this part of the income to meet the basic needs of taxpayers and their families is increasing, the personal and family minimum amounts for which personal income tax is not taxed are also increased at the same rate (4.3%). of inflation.

Meanwhile, the Community of Madrid has announced that it will cut portions of the regional IRPF rate by 4.1% in an effort to impact the Income Statement of Madrid residents. The aim of this progress, which is planned to come into effect in 2023, is to help families “more resources to deal with high inflation and an increase in energy, fuel or food prices”.

Once approved this year, it will be added to the half-point deduction of all regional divisions of the tax, which came into effect on 1 January and was approved by the Community of Madrid. Estimated savings of more than 300 million Euros.

In the case of Murcia, the Government headed by Fernando López Heritage has approved by decree the reduction of the first four autonomous divisions of personal income tax by 4.1%. Plans to benefit 330,000 Murcias Estimated total savings of between 8.5 and 10 million Euros.

According to the Government of the Region of Murcia, this deflation will affect 96% of those who need to file Income Tax returns.

For its part, the Junta de Castilla y León has passed the bill on tax cuts in the Community, which would allow the first tranche of personal income tax to be reduced by 5.3 percent.

Specifically, the project will allow the reduction of the Personal Income Tax (IRPF) for all Castile and León taxpayers, reducing the regional rate already in the lowest division by 2022. In this way, the first part of the regional scale applied to the general taxable base of personal income tax represents a reduction of 5.3 percent, with a half-point reduction from 9.5 percent to 9 percent.

In the midst of this race, the President of the Government of Aragon, Javier Lambán, acknowledged on Tuesday the “possibility” that taxation in his autonomous community could be changed. If the four parties forming the government agree. Javier Lambán recalled that in the investment deal, the four – PSOE, PAR, CHA and Podemos – agreed that fiscal policy would not move “neither up nor down”.