Spain’s minority leftwing socialist government coalition of PSOE and Unidas Podemos (United We Can) is planning to implement a tax hike for high-income individuals and corporations in its new budget for 2021 presented on Tuesday (27 October), EFE reported.
Prime Minister Pedro Sánchez and Vice Prime-Minister and Unidas Podemos leader Pablo Iglesias detailed the new plan, which puts a big emphasis on the social policies required to alleviate the economic impact caused by the coronavirus.
“This is a progressive budget; it is exceptional due to the situation and because of the amount of public investment involved (…) The first goal is to rebuild what the crisis took away from us due to the pandemic. The second is to modernise our productive model. And the third is to shore up our welfare state”, said Sánchez, as quoted by Spanish media.
The hike will affect about 17,000 people qualifying as Spain’s richest taxpayers with yearly incomes exceeding €200,00 and €300,000 the richest, El País reported.
This hike, Sánchez and Iglesias stressed, will help fund the the country’s budget for 2021, a record public investment of nearly €239.8 billion.
Among other measures, the new budget reduces deductions for private pension plans, establishes a minimum tax for companies and limits capital gains from subsidiaries of large companies, and reduces the current exemptions from corporation tax for dividends.
The agreement between Sánchez and Iglesias, which was very difficult to forge due to the many differences among the two leaders within the governing coalition – now needs to be backed by the Spanish parliament. (EUROEFE / Madrid)