Valencia Region To Lower Income Tax For Those Earning Under €60K
Spain News
Published: 28 September 2022 13:11 CET
Updated: 31 January 2023 13:11 CET
More than one million people living in the Valencia region are to pay less tax under new fiscal reforms.
The announcement which was made by Valencian regional president Ximo Puig on Tuesday, September 27, will mean that all those earning under €60,000 per annum will see a reduction of 10 per cent in their yearly income tax thresholds.
The move will mean that more than 1.34 million workers in the region or 97.4 per cent of taxpayers will be better off as a result of the new fiscal policy.
Furthermore, as the reduction in income tax will be retroactive, the changes will apply from January 1st 2022, meaning that any reductions will be seen in the declaration for 2022 which is submitted next year.
The region’s President explained that those earning €10,000 would save 21 per cent (€94). Workers earning €20,000 will save 7.3 per cent (€117) with those earning €30,000 saving around 2.2 per cent or €67.
As an example, Puig said that a young single person under 35 earning €28,000 and paying €8,000 on their mortgage will pay €530 less in their next tax return.
According to the Ministry of Finance, a couple who have an 80-year-old dependent relative, earn €30,000 and filing a joint tax return would reduce their net regional tax by €162.
Puig said that the average worker in the region would save around €111 in tax with families in the region saving a total of €149 million euros.
The minimum tax threshold will also increase to €6,105, meaning that more than 33,000 would not pay any tax at all.
Under the initiative, those earning more than €60,000 gross per year will continue to pay the same amount of tax.
Minister of Finance and Economic Affairs, Arcadi España said, "the fiscal reform proposed by the Generalitat is progressive and responsible, and guarantees that those who have more resources, continue to contribute to the common fund. We keep income taxes higher while reducing the tax burden on middle and working incomes."
Each of the country’s regional governments are able to change the rate of income tax (IRPF) that is collected, however, this can only be adjusted for the first 50 per cent.
There were a number of other measures which will aim to combat the rising cost of living. Those under 30 will be able to travel for free on the region's metro, trams and buses with the concession lasting until the end of the year. This move alone could save more than 1.5 million young people around €135 each.
A discount of 30% would be available to all other travellers.
Minister of Territorial Policy, Public Works and Mobility, Rebeca Torró said, "This measure complements all the savings initiatives in public transport launched by the Generalitat in a pioneering way since the beginning of the year to promote sustainable mobility, alleviate the expenses of citizens and combat the effects of inflation.”
Those with a mortgage and earning up to €30,000 per year would also see a €100 tax deduction on their repayments.
It follows a recent announcement from the Andalusian region government who said they would be scrapping wealth tax and in Murcia where the government there said they would be reducing the income tax rate by 4.1 per cent.
Source
https://comunica.gva.es/va/detalle?id=364649950&site=174859746
https://comunica.gva.es/va/detalle?id=364672043&site=174859783
https://www.thelocal.es/20220927/spains-valencia-region-lowers-income-tax-for-yearly-earnings-under-e60k/
https://murciatoday.com/valencia-government-announces-tax-cuts-to-combat-inflation-and-soaring-living-costs_1846322-a.html
Image Credit: https://www.gva.es/
