The fiscal plan announced by the central government will have real-world effects beyond political debates, touching on tensions with the PP and some autonomous communities, including Valencia. Tax deductions included in the package stand to benefit nearly half a million workers and over 6,000 companies, with a notable impact on the Alicante province. Trade unions welcomed the move as a measure that could help families weather inflation, while business leaders argued that the relief falls short given higher energy costs and rising costs for raw materials. Both sides agree that there is a need for structural tax reform that truly supports households and businesses alike.
The government proposal creates a work-income deduction for earnings under 21,000 euros per year. In Alicante, this change would reach about half a million workers, representing roughly 70 percent of the total according to tax authority data. The deduction for job income will rise from 18,000 to 21,000 euros in the average salary, and the minimum taxable wage will increase from 14,000 to 15,000 euros. Estimates from the Treasury indicate that someone earning 18,000 euros would save around 746 euros annually and pay roughly 40 percent less in taxes as a result.
The package also contemplates a reduction in the nominal rate of corporate tax, cutting the rate by 2 percentage points for companies with annual billing up to one million euros. Alicante’s Chamber of Commerce notes that around 6,200 local firms could benefit, with about 4,900 additional companies potentially excluded due to higher turnover than the cap. The overall design aims to relieve fiscal pressure on smaller enterprises while keeping reform on the table for broader corporate tax relief.
What do the main actors think? Unions praise the measure for aiding workers in coping with price increases, while a central union figure in l’Alacantí-Les Marines notes that price levels in the region have not adjusted in step with inflation. They argue that a more progressive tax system is needed, one that asks higher earners to contribute more to public finances. A representative from CC OO in the Central Regions echoes the call for structural reform and greater progressivity, stressing that a stronger tax framework should reflect current economic realities.
Salvador Navarro, president of the Valencian Community Business Confederation, welcomes the relief for self-employed and small businesses but regrets the limited allowance for loss carryforwards in corporate taxation. He warns that restricting consolidated groups from reclaiming losses could dampen investment and limit job creation. The CEV also advocates lowering personal income tax rates to boost growth and competitiveness in the region.
Carlos Baño, president of the Alicante Chamber, described the discount for companies as insufficient, especially when contrasted with rising energy tariffs. He argues that fiscal relief should be deeper and that a reduction in public spending by political actors should accompany any tax cuts. The sentiment is echoed by industry leaders across sectors, including textile and footwear, who consider the measures too narrow for firms surpassing the one-million-euro turnover threshold. A hotel management association official adds that the same concerns are shared by the broader business community in tourism and services. Leaders in metal manufacturing and toy production also express a desire for more comprehensive reforms, while others view the current steps as a positive move that keeps money circulating in the economy.
In this context, observers stress that a genuine tax overhaul would require broader breadth and depth. The discussion centers on aligning tax rules with contemporary inflation trends, improving the fairness of the system, and ensuring that smaller business concerns receive meaningful support. As policymakers weigh these considerations, the aim remains to balance relief for workers and small businesses with incentives for investment, innovation, and job creation across the region and beyond. (Sources: Treasury data; local chambers and industry associations.)