Fiscal policy remains a central topic in public debate at both the state level and within Spain’s system of autonomous communities. Against a backdrop of inflation and the economic effects of the war in Ukraine, tax management sits at the core of strategy for both left and right blocs, each proposing different recipes within a shared framework. The 2023 election campaign gained momentum, and the trajectory suggests that reform will continue to drive electoral support as lawmakers recalibrate taxes. If progressives and conservatives share a common starting point, it is the approach to tax policy. In Alicante, tax intake rose through July, climbing 21.8 percent above the national average and totaling 2.632 billion euros. Even larger was the inflow to the Generalitat’s coffers, surpassing 745 million euros between January and August, up 45.7 percent from the prior year. [CITE: Valencian data office; 2023–2024 period]
The post-Covid rebound, rising inflation that affects household budgets, and Valencia Community’s ten months of uninterrupted employment growth through August all shape tax revenue. The income collected from Alicante residents by both the Generalitat and the State reflects this recovery. Three major taxes illustrate the trend. Personal income tax rose by 26 percent through July, reaching 1.155 billion euros; value-added tax increased 18.9 percent to 1.193 million euros; and corporate tax produced 119 million euros, up 14.4 percent. These taxes are largely administered by the central government, yet they have a direct impact on Valencian finances, with roughly half of VAT and a similar share of personal income tax revenues transferred to autonomous communities. Other levies are included, such as VAT paid by large Madrid-based companies when purchases occur in the province, as seen with the Madrid Large Taxpayer Unit. [CITE: regional fiscal reports]
Take home
Among taxes collected directly by the Generalitat, growth has been even more pronounced. In the first eight months of the year, revenue from Property Transfer Tax, linked to home sales, exceeded 528 million euros, a 58 percent rise. Documentation duties, which tax mortgage formalization among other things, rose 19 percent, contributing 90 million euros to the regional fund. Inheritance tax also climbed by around the same percentage, surpassing 79 million euros, with the main driver being the higher death toll seen during the pandemic era. [CITE: Valencia fiscal balance report]
Collection figures for the province’s main taxes are summarized here for context.
Is there room for adjustment in taxation? Is reform appropriate to address the current situation? These questions find broad support across the political spectrum in the Valencian Community. At present, all signs indicate that the Generalitat plans a tax change that would take effect after the Budget Incentive Law is enacted before year-end. Socialist Ximo Puig, head of the regional government, signaled the reform while the political season opened, though few details have been released. Puig stressed that the reform would center on financial progress aimed at benefiting low- and middle-income earners, without broader claims. The regional government will outline the main axes of the proposal, while coalition partners Compromís and United We Can remain cautious as they await the policy’s fine print. On the national stage, Puig has called for fiscal reform to harmonize taxes and avoid fiscal dumping, a concern often raised in Madrid. The Pedro Sánchez administration has signaled a potential move to tax wealth more heavily, a proposal that United We Can previously rejected. [CITE: regional government statements; national press briefings]
“Tax Revolution”
The main opposition party, led by Carlos Mazón, has not joined the fiscal expansion favored by some regional leaders, which has included proposals to abolish wealth tax and reduce personal income tax in their community. Other regions such as Murcia and Madrid have floated aggressive tax-cut measures, including broad personal income tax discounts and patrimony reductions, while Madrid has pushed a hard stance against centralized taxation. A year earlier Mazón presented his own tax reform plan, including abolishing wealth tax, expanding inheritance and donation discounts, and reconfiguring the property transfer and personal income tax burdens. Tax cuts have become a recurring theme in political rhetoric, aligning with arguments heard from other parties. With limited opposition room, these proposals are already shaping the discourse as the election debate intensifies.