The Treasury suggests to Brussels that it will raise personal income tax, VAT and the diesel tax in 2021 | Economy

The coalition government formed by PSOE and United We can yesterday informed Brussels about the main lines of the tax reform that is finalized for 2021, including veiled references to a possible increase in personal income tax on high incomes, the diesel tax or some sections of VAT.

The budget plan sent to the European Commission by the Ministry of Finance foresees that revenue over GDP will go from 41.7% in 2020 to 40.3% in 2021, assuming that the recovery will trigger the size of the economy by 7, 2% and 9.8%, although in quantitative terms it is expected to capture 33,447 million more than this year. The bulk of the increase in collection is explained by this economic reactivation, while the Government estimates that it will enter an additional 6,847 million euros in 2021, and 2,323 in 2022, with new taxes, and some minor tax cuts.

Among the new tax figures are the Google rates (on digital businesses) and Tobin (on the purchase of shares), which will come into force in January, and with which it aims to collect 968 and 850 million euros annually, respectively. It also includes the recently promoted law of anti-fraud measures with which the Executive aspires to obtain another 828 million by raising the control of cryptocurrencies, lowering the limit of cash payment between professionals from 2,500 to 1,000 euros or improving the fight against accounting in B and tax avoidance

As novelties, the plan sent to Brussels also includes an increase in VAT on sugary and sweetened beverages, which will go from a rate of 10% to 21%, to “promote healthier habits”, in order to enter 340 million.

The fiscal package incorporates environmental cutting measures such as the tax on plastic containers that the Executive plans to have in force in 2021 to enter 491 million, and a green tax battery to obtain another 1,311 million, presumably with the fiscal equalization of diesel to the gas.

The plan sent to the EU does not include specific increases in personal income tax on high incomes, VAT on health or private education, or the revision of the taxation of private pension plans that the coalition government partners have been discussing in the recent weeks, although it incorporates some income items that, without specifying it, coincide with these approaches.

Thus, the document sent to Brussels foresees an additional collection of 554 million in direct taxation in 2021 (and another 1,998 million in 2022), which predictably corresponds to the increase in personal income tax on high incomes, and 1,509 million indirect, due to VAT revisions or special taxes.

However, it must be taken into account that the negotiation of the last fringes of the plan is still open and that the negotiation with the rest of the parliamentary forces whose support is essential to approve the accounts could modulate the appearance and scope of some of these measures within the budget project that reaches the Congress of Deputies.

In parallel with the income plans, the Government estimates that the weight of public spending on GDP will fall from 53% to which it has shot up in 2020 to 48%, again due to the increase in the size of the economy, although in terms absolute will mean an additional outlay of 2,419 million. In addition to the health and social bill that the Covid will continue to leave, the Government already foresees a full year of payment of the minimum vital income (3,000 million euros), the increase to 16 weeks of paternity leave (307 million) or a revaluation of pensions with the CPI (1,439 million).


Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.