Andalusia wants to abolish wealth tax

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wealth tax

SEVILLE – The president of the autonomous region of Andalusia has announced his intention to abolish the wealth tax in the region. This is one of the measures included in a package of tax cuts

This package also includes the reduction of the income tax (IRPF) in the first income brackets, an increase in the exempt amounts of IRPF and the suspension of the water cannon (an ecological tax on the use and pollution of water). The latter is a striking measure in the unprecedented dry period in which Andalusia finds itself with regions where restrictions have been placed on water consumption for months.

These measures come on top of others announced days ago, such as the ‘zero quotas’ for new self-employed. All these measures will leave 360 ​​million euros in citizens’ pockets by 2023, according to El Economista, according to Juanma Moreno (PP).

Positive tax effect

The Andalusian president explained the several tax cuts at an event in Madrid. He added the wealth tax suspension will have a positive tax effect on Andalusian tax collection. It will attract new high-income taxpayers, Moreno said, who are currently not registered in the autonomous community.

The president explained that in 2019, half of the top 20 contributors to wealth tax in Andalusia left the autonomous community. This had a direct impact on the regional treasury of just over 3.5 million but meant a decrease of 14 million euros in income tax paid (IRPF).

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Measures should attract more taxpayers

Now the government expects to attract more taxpayers with the tax cuts. Moreno pointed out that the measures already implemented in the previous legislature have brought in more taxpayers. Furthermore, these brought in more money to the public treasury to fund basic services. Below, were measures such as the abolition of inheritance taxes and other reductions.

He added that the previous tax cuts ultimately resulted in savings of 540 million euros.  This added to the 360 million in savings from the abolishing of the wealth tax means that a total of 900 million remains in the hands of Andalusian families as a result of the successive tax cuts that have been made.

A tax cut in the first three tax brackets

Moreno went on to discuss the reduction of the personal income tax (IRPF). This includes lowering the rate in the first three income brackets by 4.3%. This means that salary increases to compensate for inflation do not imply higher tax payments. In addition, the amounts that are exempt from personal income tax will increase by 4.3%. Moreno intends that Andalusia, together with Madrid, is the sub-region where residents pay the least tax.

Administrative simplification

Andalusia’s other recipe for attracting investment and boosting business, besides taxation, will be administrative simplification. The district government initiated this path already in the previous legislature to further explore it in the current term.

Moreno demands hydraulic works from Madrid

Moreno has also demanded waterworks from the central government. “Andalusia will stop without water, and that will hold back the third largest economy in the country. Water is for Andalusia as gas is for Germany,” he said at the Joly forum. There, the president also argued for a reprogramming of the Next Generation funds, to be able to use some of them for the so-needed water infrastructure.

Baycrest Wealth

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