For another year, Catalonia will continue to be the autonomous community with a common regime where low incomes pay a higher personal income tax, after the rejection of the Generalitat’s 2024 budget by the majority of the Parliament’s political groups. The law accompanying public accounts established a reduction in the regional scale rate in the first tax bracket by one point: from the current 10.5% to 9.5%.

The measure retroactively benefited all citizens with an income of 33,000 euros or less per year to January 1. That is equivalent to 73% of the total taxpayers: about 2.6 million. For the rest, the measure would have had a neutral impact since taxation in other brackets would be adjusted upwards slightly (a few tenths).

It was estimated that an average taxpayer would save about 125 euros in paying the tax, within a scale that was divided into eight brackets – the previous nine – and rates that ranged from 9.5% to 25.5%.

The measure was intended to alleviate the increase in the cost of living for families and also protect against jumps in brackets, and a higher payment of taxes, which occurs with salary increases that aim to compensate for inflation.

The cost of this reduction in personal income tax planned for 2.6 million taxpayers promoted by the Government of the Generalitat and which has now been rejected with all the budgets amounts to 55.7 million euros, as stated in the Annual Report. Impact evaluation of the budget monitoring law analyzed by the Consell de Treball Econòmic i Social de Catalunya (CTESC). According to the aforementioned Report, the impact of the loss of collection would not have occurred until 2026, when the financing model corresponding to 2024 is liquidated.

If the accounts go ahead and with the new fiscal table in the tax, Catalonia would not be positioned in the rest of the sections as the community with a higher tax rate, one of the most repeated demands from the employers’ association. After the rejection of the accounts, the community will not finally join the tax reductions that a dozen communities have promoted in the last two years, either through deflation to alleviate the rise in inflation or with the reduction of taxes. guys.