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The refusal of the Government has adapted (deflate is the technical term) the personal income tax withholding tables to the evolution of the price index supposes a hidden increase in taxes for the Spanish. Various calculations estimate that this declarant will pay between 95 and 100 euros per media, but the correspondence if the CPI does not hub will vary by 3,1% per media in 2021.
Ciudadanos is the only party that has been concerned with this matter and presented a non-law proposal (PNL) to collect the erosion that inflation implies in purchasing power. “The current thresholds of the general income tax scale have not been modified since January 2015. They increased by 12,8%.
Consequently, many taxpayers who, due to the effect of the nominal variation of their income, without having really noticed their economic capacity, are paying today for a higher tax rate than they should," explained the proposal signed by Edmundo Bal.
The Minister of Finance has turned a deaf ear to the requests and it is heard that it is waiting for the report of the commission of experts for the tax reform that it should receive on February 28. The last time that the personal income tax tables were deflated according to inflation was in 2008. Between last year and the last year of 2022, the accumulated inflation has reached 22,4%. Many people who have managed to keep their purchasing power will probably have voluntarily jumped the band not because they are richer, but because the Treasury has maintained nominal values.
The matter looks more aberrant if it is considered that there are parts of Spain where this deflation is going to take place. The Provincial Treasury of Vizcaya reported on January 3 that it has decided to deflate by 1,5% the income tax withholding tables in force in its territory. "It should be remembered -adds the official statement- that the adjustment of 1,5% has also occurred in the rates and in the personal elements of the tax through the Foral Regulation of General Budgets for 2022".
"The objective of deflation is to prevent the updating of salaries from producing a jump to the upper bracket of yields and therefore a greater retention", stressed the Treasury of Vizcaya. The Hacienda Foral de Álava also updated, through a decree of December 28, 2021, the retention porches applicable to work income with effect from January 1, 2022.
The non-deflation of withholdings, tax brackets and deductions leave the contributor trapped between the decrease in their purchasing power, due to the loss of currency value, and a Treasury that sees how its collection fattens without taking advantage of the economic capacity of tax subjects. [email protected]
