The Government has transferred to the European Union that it will lower the debt to 4.5 points in 2022, placing it at 115.1% of GDP from 119.5% this year. The Government maintains that it will thus contain the level of doubt despite signing the most expansive Budgets in history. The 2022 Budget Plan, sent to Brussels on Friday for the approval of the European Commission, states that the consolidated State spending for 2022 will be 458,970 million euros -the highest spending in history-, of which 27,633 will belong to the European funds.
Moncloa thus trusts the Accounts to GDP growth figures of 7% for next year, well above the consensus of economic analysts. Last week, the International Monetary Fund cut growth figures for the Spanish economy. In his opinion, it will grow 5.7% this year and 6.4% in 2022, six points below what the Government estimates.
The Government insists to Brussels that it will achieve these historical collection figures of 232,352 million euros. However, the fiscal measures planned by the Executive are not as ambitious as those of other years. The change in the taxation of pension plans and the changes in the Corporate Tax (IS) are two of the measures that the Treasury has promised Brussels.
The promised tax reform
The document also contemplates the reduction in personal income tax of the general reduction limit applicable to the tax base for contributions and contributions to pension plans from 2,000 to 1,500 euros. The accounts include the increase in the reduction limit for contributions to pension plans from 8,000 to 8,500 euros, not only by making business contributions, as is already the case, but also by worker contributions to the same social welfare instrument, always that these contributions are equal to or less than the respective contribution of the employer.
However, according to the Government, these measures will mean an increase in collection of only 77 million euros. In addition, it recognizes that its effects will be seen from the second quarter of 2023, when the IRPF returns for the 2022 financial year begin to be filed.
In Corporate Tax, it establishes a minimum rate of 15% on the tax base of consolidated groups or companies whose turnover is equal to or greater than 20 million euros, which means that it will not affect small and medium-sized companies. For newly created companies, this minimum rate will be 10%, while for credit institutions and hydrocarbon exploitation the minimum tax will be 18%. The Minister of Finance herself, María Jesús Montero, acknowledged last week that the global minimum tax will barely have an impact of 50 million euros on collection.
Also included in the Corporate Tax is a reduction in the percentage of bonus to the income derived from the rental of homes, which goes from 85% to 40%, in order that the minimum rate of 15% is also applicable to the companies engaged in this business. The Treasury calculations contemplate a collection increase of 421 million euros due to the changes introduced in Societies in the General State Budgets of 2022.
rising expenses
Despite signing the largest public spending in history, the Government hopes that next year’s good economic performance will reduce the percentage of public spending, debt and deficit in Spanish accounts. Thus, Moncloa promises Brussels that the weight of spending on GDP will drop to 44.7% in 2022 from the 49.6% expected in 2021 and the 52.4% reached in 2020 due to the sharp drop in the economy that caused the pandemic and the support measures for families and businesses adopted by the Government to mitigate the consequences of the recession.
Regarding public spending by functions, Education will represent 9.2% of the total, compared to the 9% that is expected to be in 2021. This is due, according to the comments sent to Brussels by the Ministry of Finance, to the budget of more of 5,000 million euros that the educational policy will have in 2022, a figure that is also unprecedented, as is the item for scholarships, which will be close to 2,200 million euros next year.
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