Spain will implement a “solidarity tax” from 2023 on people with assets worth at least €3 million, Budget Minister María Jesús Montero announced at a press conference on Thursday.

The government’s new fiscal instruments will affect wealth, personal income tax and corporate tax, said Montero of Sanchez’s socialist PSOE party.

The new tax, which will affect 23,000 taxpayers or 0.1% of Spain’s population from 2023 to 2024, has the potential of collecting  €1.5 billion, she said.

The move comes after the centre-right opposition Partido Popular (PP/EPP) and the socialists proposed significant tax reductions in their respective regions to seduce voters ahead of next year’s municipal elections in May and the following year’s general elections.

According to the government, it is crucial that the wealthiest also do their part to help mitigate the negative impact of record inflation, the minister said.

She added that it is necessary to “practise tax pedagogy”.

The new tax will have three brackets – including a 1.7% rate for €3-€5 million, a 2.1% rate for €5-€10 million and 3.5% for over €10 million.

Meanwhile, the left-wing Spanish government announced a raise in taxation of capital by one point, to 27%, and for capital gains over €200,000, to 28%, two additional points compared to current taxation rates.

Along with the “solidarity tax” on high incomes, the government will soon approve new measures modifying the personal income tax to favour middle and low incomes, raising the ceiling of tax reductions currently applied to incomes of up to €18,000 to €20,000. The government announced that the measure has a collecting potential of €1.881 billion.

Personal income tax will also be exempt for those earning  €15,000. Currently, the ceiling is at €14,000.

The minister also announced a reduction in corporate tax to 23% for small and medium-sized enterprises (SMEs) with a turnover of less than €1 million and a temporary limitation on deductions for losses from previous years that can be applied by large business groups.

(Fernando Heller | EuroEFE.EURACTIV.es)

Source: Euractiv.com