The Lehendakari and the General Deputies /
841,000 Basques will have a bonus of up to 200 euros for personal income tax that will adjust all its sections by 4%
“That all individuals and families will have more money in their pocket.” With that eloquent phrase, Lehendakari Urkullu tried to explain on Thursday the objective of the fiscal measures agreed between provincial councils and the Basque Government. A package that, de facto, involves reducing the payment of taxes in a generalized way through an adjustment in personal income tax that, despite everything, does not fully offset the impact of a price increase of around 10%. And it is that the star measure of those presented is the deflation of the personal income tax rate brackets by 4%, which is added to the 1.5% set in January and which accumulates 5.5% for this 2022. In September it will be adjusted in this sense, the table of withholdings in work income, with which the workers will see their payroll somewhat fatter. The measure supposes a fiscal relief and changes the step opening a new scene in Euskadi that contrasts with the position of the Government of Spain that has not touched this aspect of the tax. Only some communities governed by the PP, such as Madrid or Andalusia, have used the resource of deflating the IRPF rate brackets. The movement had been demanded by some opposition parties and several experts had pointed out this way as a way of alleviating the impact of the price increase, more in a scenario in which the collections of the Basque haciendas rise, surpassing historical ceilings pushed, among other things, by the CPI and its effect on VAT.
Bonuses of 200 euros
In addition, the Basque institutions have announced bonuses of up to 200 euros in income for taxpayers with incomes below 30,000 euros and that they will be maintained in descending sections until those who enter 35,000 euros. A route to which up to 841,534 Basques who, according to the data of the provincial estates, present these conditions, will be able to take advantage. 396,757 in Bizkaia, 304,048 in Gipuzkoa and 140,729 in Álava.
Freelancers and companies
The self-employed will be exempt from submitting the installment payments for the third and fourth quarters of this year. As well as companies whose turnover does not exceed 50 million.
The fiscal cost of these measures has been valued by the councils at 250 million euros, 140 million that will alleviate the payment of taxes for all taxpayers and, on the other hand, 110 million that are aimed at people who are more vulnerable due to their social situation and economic.
It is the first movement of the Basque treasuries since the price and energy crisis broke out that contemplates a reduction in the tax bill for the generalized citizen. Until now, the measures had been focused on the most affected groups and payment deferrals, but not with a tint of generalized decreases. In any case, Urkullu insisted on his “temporary” character. The Lehendakari recalled that the general tax debate is pending, for which a calmer scenario is required. At the moment, he explained, “we are analyzing the situation in the hope that the measures will be circumstantial.” Regarding the future, Urkullu insisted that the administrations will continue to analyze the evolution of the economic picture and the effectiveness or not of the measures adopted to, where appropriate, expand the range of action.
The will of the Basque Government is to maintain the objective of attending to social needs in its Budgets for 2023. For this reason, the Lehendakari explained that these measures and their fiscal cost for the estates “will not weaken the social policies” of the Executive. Urkullu defended that the package of six fiscal measures announced yesterday complements other investment and support actions for the economy launched by the Basque Government. The Executive approved last month its economic guidelines to prepare the 2023 Accounts, an exercise in which the objective of exceeding the spending ceiling of 13,000 million euros is maintained to continue favoring economic reactivation, but with attention to indebtedness.
In this sense, he recalled the 1,569 million invested since the outbreak of the pandemic in 2020 to strengthen the health and education systems and support sectors such as commerce, hospitality, tourism and culture.
Criticism of PP and ELA
From the Popular Party, a formation that had been intensely demanding deflation in personal income tax, “the measure is late” and may remain a “cosmetic” movement with little effectiveness. In this sense, the center-right formation points out that 250 million is a small amount compared to the growth in collection generated so far.
For its part, the majority union in Euskadi, ELA, described the measures as “fraud” because the adjustment of personal income tax is far from inflation. The nationalist central has accused the Basque administrations of not promoting taxation that “really burdens capital and heritage.”