First the coronavirus pandemic, then inflation, but the truth remains that the municipalities of Alicante have kept delivering measures since 2020 to support citizens, self-employed individuals, and small businesses amid a challenging economy. Recovery efforts continue in the new year as councils unveil fresh initiative packages. Direct assistance targets families facing high interest rates and tax freezes or the current price surge. Precautions show common patterns, though each locality adds its own nuances. Conservative administrations emphasize the economy and trade, while progressive cities tilt toward social programs.
Inflation currently dominates the concerns of families, self-employed people, and small and medium-sized enterprises. Although conditions have shown some improvement recently, prices—especially in everyday goods—keep rising, and this has not gone unnoticed by city councils close to residents. They reaffirm measures aimed at weathering the storm.
In Alicante, governed by the PP with support from Ciudadanos, an incentive plan is designed to help confront the crisis, revive economic activity, and support job creation and social welfare. The plan proposes a 95% bonus on capital gains taxes for inheritances between direct relatives, a bonus on business transfers, and a reduction in the Economic Activity Tax (IAE) for companies with revenues under one million euros in economic activities declared of special or municipal interest. There will be a tax reduction for businesses that use or produce renewable energy, and an amendment to the Construction and Build Tax (ICIO) rules to adjust payment. It also supports a subsidy program for taxi refurbishment, tax incentives for green roofs and vertical gardens, and conservation efforts in protected buildings. Property Tax (IBI) deductions are limited to century-old businesses. All of this complements measures already in place to help SMEs, micro-SMEs, small self-employed professionals, and others mitigate the effects of the energy crisis.
The Elche City Council, led by the PSOE, announced 7.5 million euros to ease the economic impact of the war in Ukraine. Exceptional measures include suspending fees for tables and chairs and extending terraces for hotels and restaurants for the fourth consecutive time, along with discounted energy for families facing rising costs. The Elche consortium will continue to assist with IBI, electricity, and gas payments. It also plans to increase the social aid budget, which had been reduced due to other rising expenses, including higher electricity bills, while maintaining the treasury reserves.
water and waste
In Benidorm, under PP management, the City Council decided to raise costs for waste and water treatment, yet will continue to offer consumer bonds that benefited more than 45,000 residents in recent editions, without impacting residents or businesses. Additional aids promote the use of public transport, including taxis and buses, as part of measures implemented since the pandemic to assist the tourism and hospitality sectors.
In Alcoy, governed by a socialist administration, measures aim to confront the tough economic situation facing families and businesses. Looking ahead to the new year, all rates and public prices are slated to be frozen. An extraordinary assistance of up to 300 euros is planned for families whose income does not exceed the inter-professional minimum wage. An economic item of 300,000 euros will be allocated. The City Council will also raise the current social assistance by 15% and continue to support both small businesses and the self-employed so they encounter fewer problems in this regard.
inflation and elections leave half of city council budgets without approval
Torrevieja, another PP-led consortium, continues to implement measures rather than introducing new initiatives. Taxes remain suspended for occupying public streets, including terraces for bars and restaurants and street markets, reflecting the municipality’s scale with more than 700 catering establishments and around 500 street vendors. Torrevieja was the first city to implement a consumer bonus program to stimulate local spending, and it is already on its sixth campaign. The City Council also allocates one million euros to distribute non-perishable food and hygiene products to the most disadvantaged families. Hidraqua, the local water company, provides bonuses to consumers who can demonstrate an inability to pay their bills.
Elda, under PSOE leadership, chose to freeze taxes and wages through 2023. This measure covers Property Tax (IBI), Construction, Installation and Construction Tax (ICIO), general rates, and all public prices, including those for sports facilities and municipal swimming pools. For the first half of this year, the occupation tax on public roads with tables and chairs on bar and restaurant terraces was suspended. These measures accompany the energy bonus program, which allocates 600,000 euros to helping SMEs, the self-employed, and businesses cope with higher electricity, gas, and fuel costs.
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Consell and the State Legislature are also promoting measures
The Generalitat is taking steps to shield Valencian families from inflation. The Consell recently enacted a decree extending the 10% reduction in public tariffs and prices until August 31 and extending the suspension of the cleaning fee for taxpayers until July 31. The Botànic government, led by Ximo Puig, will supplement national aid to lower the cost of public transport and support travelers after fuel-price reductions, while also seeking to reduce vehicle use when possible. Additionally, new tax incentives have been introduced to support economic activity in municipalities at risk of depopulation, to attract and retain businesses, and to protect historic centers and districts that embody historic architecture.
To this end, the Generalitat amended the personal income tax regime to include new reductions and cuts. Real estate transfers to company headquarters or business centers now carry a lower rate, reduced from the general 10% to a favorable 4% in the form of burdensome asset transfers. Likewise, for companies that acquire real estate for the same purpose, a 30% bonus is applied to the gradual quota of the documented legal transaction modality.
In the first quarter of this year, the Alicante Provincial Council will mobilize an emergency fund initially equipped with an extraordinary reserve of 115 million euros to combat the rise in energy prices and the cost of living. The head of the provincial agency, Carlos Mazón, has announced a new 20 million euro consumer coupon campaign, doubling the scale from 2022, and a rise in energy crisis funding from 9 million to 15 million. A special 5 million euro scheme is planned to help the self-employed pay rent for their workplaces, with funds aimed at SMEs and micro-SMEs for the same purpose. This extraordinary fund will retain a strong social focus, continuing assistance to municipalities for social expenditures caused by the Covid-19 crisis, while increasing from 9 million to 15 million euros this year. Finally, Plan + Cerca de la Diputación is set to be strengthened, increasing its donation to 40 million euros, four times higher than in 2022. The 115 million euro aid package represents the Provincial Assembly’s extraordinary fund, with 34 million euros more than the previous year for similar purposes. One of the most well-received programs is the consumer bonds initiative, adopted by many municipalities to encourage shopping at traditional stores.