2023-12-28 05:00:10
The President of the Government, Pedro Sánchez, yesterday took pride in the extension of part of the social shield that he launched to contain the harsh effects of inflation and boasted about the growth of the Spanish economy, which doubles what most studies estimated at the beginning. the exercise. In an appearance at Moncloa, as a review of 2023, Sánchez broke down the content of the omnibus decree with which he will inaugurate the new year and exhibited his credentials after the renewal of his mandate. “The Spanish economy has denied all the prophets of chaos, showing solidity and strength, despite the uncertainty that we are experiencing in the entire international context,” he said.
The Chief Executive confirmed the maintenance of most of the measures of the so-called “social shield”, although there will be a gradual increase in taxation on energy. Extends free public transportation and discounts; It maintains taxes on banks and energy companies, although in the latter case with the option of deductions for investing in energy transition projects, and the prohibition will continue (at least until 2025) on carrying out evictions of vulnerable people without a housing alternative.
The birth of the omnibus decree has been achieved after an intense debate between the socialists and Sumar partners, especially on the maintenance of bonus and free measures for public transport and taxes on banking and energy companies. The PP will only support the decree if the VAT reductions are increased
Energy.
The Council of Ministers approved a gradual increase in energy taxation until the levels prior to the outbreak of the energy crisis are recovered: thus, it agreed to raise the VAT on electricity from the current 5% to 10% throughout 2024; the special electricity tax (IEE) will go from the current 0.5% to 2.5% during the first quarter of the year and 3.8% during the second; and the tax on the value of the production of electrical energy (IVPEE) will have a rate of 3.5% until March, going to 5.25% until June. In the case of natural gas supplies, the VAT will be at 10% for the first three months of 2024, starting when it “recovers normal levels (21%),” said Sánchez. In the case of biomass fuels, it will remain at 10% for six months. Sánchez justified the withdrawal of these tax reductions “in light of the gradual fall that has been occurring in energy prices in the last year.” “Two years ago, on the eve of Putin’s invasion of Ukraine, the price of a megawatt-hour in our country reached 360 euros, last Friday it was seven times lower (51.8 euros). The figures speak for themselves and also They speak of the consistency of this Government’s commitment to the crises that come from outside our borders,” he defended. At the same time that it dismantles the tax cuts, the Government maintains other measures, with a more limited budgetary impact, but aimed at “improving people’s lives in the midst of uncertainty” derived now not only from the war in Ukraine but also from the conflict in the Middle East, according to Sánchez. Among them, the protection of the most vulnerable consumers stands out, through the prohibition on cutting off supply, created with the pandemic, or the expansion of the discounts on the electric and thermal social bonus and the maintenance of the three categories of recipients.
Bank. “The taxes on the financial and energy sector will be extended for one year. In the case of the energy tax, we will introduce modifications to the Budgets so that strategic investments linked to industrial projects and the decarbonization of the productive system can be deducted from January 1 in our country,” Sánchez explained. From there, he assured that the Executive maintains the “commitment” agreed in the programmatic pact of the coalition Government to make these taxes “permanent.” Some words that came a few days after Repsol threatened to transfer its renewable investments from Spain to other countries if this tax was maintained beyond this year. Another of the measures announced is the elimination of commissions for cash withdrawals at the window for the elderly and people with disabilities. The elimination of commissions for cash withdrawals at the window is aligned with the protocol signed in February 2022 to guarantee the financial inclusion of both groups.
Transport. Free travel is maintained for all frequent Cercanías and Media Distancia railway users. The subsidy for metro and bus transport for regular travelers is maintained under the same conditions that apply now, as long as the autonomies contribute at least 20% to achieve a minimum discount of 50%. In principle, the measure is extended throughout next year.
Foods. The shopping basket of Spanish families will continue until next June with a VAT of 0% on basic foods and 5% for pasta and oil. The measure is adopted despite the fact that the gradual fall in energy prices has allowed production costs in the agricultural sector to be more moderate. Although when this reduction in VAT on food was first approved, an underlying CPI rate of 5.5% was set to withdraw this measure and the data from last November (the last available) places this rate one point below, in 4.5%, the Executive has decided to maintain aid at a time when food prices increased by 9% last month. Extending this tax reduction to certain foods in the first half of 2024 could have an approximate cost of close to 900 million euros.
Pensions. The Government approved the revaluation of pensions in accordance with the CPI. The INE has already published the final CPI data for November, which serves as a reference for the revaluation of pensions in 2024. Finally, contributory benefits will rise by 3.8% as of January 1 of next year and pensioners will now enter in the payroll for the first month of the year your benefit with the updated tables. The increase for contributory pensions, the most common among the group of pensioners and which are currently received by nearly 10 million people, will increase by an average of 45 euros per month.
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