Madrid To Approve Reduction In Personal Income Tax With Workers Paying Up To 6.2% Less
Spain News
Published: 19 October 2022 10:00 CET
Updated: 31 January 2023 10:00 CET
Millions of workers in Madrid will pay less income tax (IRPF) as a result of fiscal plans that will be given the green light today.
The initiative which is expected to be approved by the Governing Council of the Community of Madrid will see tax thresholds deflated by 4.1% meaning that workers earning around 20,000 euros will take home around 6.2% more.
Each tax bracket will increase with the initial base threshold rising from the current 12,450 euros to 12,960.45 euros. Although the plan was to bring in the new thresholds from next year, regional President Díaz Ayuso confirmed that they would be retroactive and come into effect for the current tax year which is filed in 2023.
In total, the move is expected to save taxpayers around 530 million euros: 330 million attributed to the half-point decrease in the tax rate and 200 million for the application of the deflationary measures.
It is estimated that savings will range from 44.34 euros for those on the lowest incomes to 577.54 for the highest paid.
Javier Fernández-Lasquetty from the Ministry of Economy, Finance and Competitiveness suggests that a taxpayer with a gross income of 20,000 euros, under the age of 65, with two children, one under three years of age, will save 80.49 euros in income tax. Of this 44.34 will correspond to the reduction in income tax and 36.15 attributed to the 0.5 point reduction in IRPF that came into force in January.
Someone in a similar situation but earning 32,600 euros per year, would be expected to save 154.74 euros, with those on a gross salary of 90,000 euros saving 577.54.
The aim of Isabel Díaz Ayuso and her regional government is to minimise the effects of spiralling inflation and the impact it has been having on household budgets up and down the country.
Source
https://www.20minutos.es/noticia/5069676/0/madrid-aprueba-hoy-la-deflactacion-del-irpf-las-rentas-bajas-pagaran-hasta-un-6-2-menos/
Image Credit: Communidad de Madrid
