Regional taxation constitutes an intricate web of own and assigned taxes in which there are numerous changes every year. However, among them, four fundamental figures stand out (the autonomous section of IRPF, Patrimony, Inheritance and Documented Legal Acts) in which the five territories governed by the PP are acting simultaneouslythrough tax cuts.
It is an unusual strategy on this scale in the fiscal field, which shows to what extent tax policy will be the core of the popular offensive against the PSOE in the regional and municipal elections in May, the first major electoral event next year.
His barons deepen that tactic with the announcement made this week by Andalusia about its intention to suppress Patrimony and deflate personal income tax. The party, however, began to work on this tactic already before the crisis unleashed by the war in Ukraine. The most recent Regional and Foral Taxation Overview, published last March by the General Council of Economists, highlighted that Madrid, Castilla y León, Murcia, Andalusia and Galicia provided all the “most important regulatory developments” (with tax reductions as common denominator) of 2022 in terms of Income Tax and also the other three key taxes of regional taxation.
The exceptions, outside the orbit of the PP, are Catalonia, Asturias and Cantabria and marking differences in all cases. Thus, in the Catalan sphere, the modifications focus on personal income tax and have led to an increase in taxation for income that the Government considers high (from 37,000 euros gross per year).
In the case of Asturias and the Canary Islands, the Income Tax charges have been lightened, but with a very focused scope in rural areas at risk of depopulation. A similarly restricted strategy is adopted by Aragón, governed by the PSOE, for areas with demographic problems. Much more general is the reduction of half a point in all the autonomic sections of the IRPF that Madrid decided this year; the lowering of the maximum rate from 48.2 to 47% in Andalusia or Galicia, which simplified its tax structure from seven to five brackets.
In recent months, however, it is in the field of deflation of rates where the popular ones know that they can take greater advantage. On a national scale, the central government is reluctant to update Income Tax rates according to the current high level of prices. The Madrid Executive responded, in the last Debate on the State of the Region, advancing to this exercise the deflation of up to 4.1%, which is the ordinary level of growth of the salary costs of the INE.
war against heritage
This week, the Andalusian president, Juan Manuel Moreno Bonilla, has wanted to make a blow of the same intensity, announcing that he will deflate the regional rate of personal income tax 4.3% in the first three income brackets of this tax. In parallel, it is in Heritage where Madrid and Andalusia also seek to measure their efforts, due to the great controversy that this penalty to wealth generates, despite being a levy with a very low collection capacity.
Both autonomies will become the only ones that fully subsidize Heritage for all citizens. It is followed by Galicia with 25%, which is also applied in a general way without establishing income limits.
With regard to Inheritance and Donation Tax, the General Council of Economists highlights the reduction in the rate approved by the Andalusian Government and the 99% discount for groups with links I and II typical of Castilla y León.
With regard to Property Transfers and Documented Legal Acts, Andalusia has lowered, effective this year, the general rate in both tax modalities. While Galicia has done so specifically in the Onerous Property Transfers section. And before the 2023 elections there may be more movements. Not in vain in Castilla y León there is also speculation about a possible elimination of Patrimony in the future.