FFE Magazine

Time has come for lower taxes in Spain

24jun spain tax cuts

 

The Spanish government’s promise to jumpstart the economy has been laid out in the form of tax cuts on Monday — a move they said was the public’s reward for the sacrifices they made in the face of extreme austerity measures in the country.

 

Deputy Prime Minister Soraya Saenz de Santamaria explained ‘The reform, after the efforts made by Spanish people confronted by the crisis, aims not only to compensate for those sacrifices but also to dynamise growth and job creation.’

 

Under the plan, taxes of individuals and businesses will be lowered in the next two years, on average by around 8%. The planned new tax rates are as follows:

 

 

  • Earning more than €60,000 – 52% to 47% in 2015, then 45% in 2016
  • Less than €12,450 – 24.75% to 20% in 2015, then 19% in 2016
  • Corporate tax rate – 30% to 28% in 2015, then 25% in 2016

 

The reform is still in its draft version and will be open to public consultation. A final version will then be submitted for parliament to approve.

 

The tax cuts come after the International Monetary Fund (IMF) declared Spain can cut its corporate tax rates since registering growth after years of recession. The definite boost in tourism starting 2013 is also jumpstarting the country’s economy.

 

The other good news for the crisis-hit Spanish economy is that according to a survey by Frontur, Spain saw 21 million tourists from January to May of 2014 alone. Last year, Spain also outpaced China as the world’s third most popular destination for international tourists with 60.6 million visitors who spent €59.08 billion.

 

Spain also registered growth in the number of tourists from Britain, Germany and the French this year compared to last year.

 

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