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Date Published: 27/09/2022

ARCHIVED - Valencia Government announces tax cuts to combat inflation and soaring living costs

ARCHIVED ARTICLE -

1.3 million people in Alicante province and the rest of the region will benefit from the tax reform

<span style='color:#780948'>ARCHIVED</span> - Valencia Government announces tax cuts to combat inflation and soaring living costs

Valencia President, Ximo Puig, announced today, Tuesday September 27, that the regional government will approve tax reforms to combat the crippling effects of inflation that will benefit 1.3 million people and includes a 100-euro mortgage deduction, a reduction in personal income tax and free transport for young people.

The aid will benefit individual incomes of up to 30,000 euros and for joint taxation of 47,000 euros.

The package of measures "to combat the cost of living crisis" includes free travel on the Generalitat's metro, tram and buses for people under the age of 30 until the end of the year. According to the president, this could potentially save around 1.5 million young people 135 euros each over the next three months.

However, one of the biggest reforms will benefit low and medium income families and residents with annual earnings of up to 60,000 euros.

Also read: Orihuela to discuss making water cheaper to combat the cost of living crisis

It hinges on three axes.

Firstly, a 10% increase in the amount exempt from taxation, although those who exceed 60,000 euros per year will continue to pay the same tax rate.

Secondly, there will be new personal income tax brackets for this year, which will mean a saving of 21% for annual incomes of 10,000 euros; 7.3% for incomes of 20,000 euros, and 2.2% for incomes of 30,000 euros per year. Those above 60,000 euros will maintain their current tax effort.

And thirdly, allowances and deductions will be increased by 10%: for children, rental housing, large or single-parent families, reconciliation of family life, nursery or schooling for children under two years of age. The income eligible for the deduction will rise from 25,000 to 30,000 euros.

The measures will be retroactive from January 1 of this year and will be applicable to the 2022 income tax.

According to Puig, the reform will assist 97.4% of taxpayers and all those who earn less than 60,000 euros per annum.

"It will mean an average saving of 111 euros per taxpayer and an overall saving of 149 million euros for families," he assured during a general policy debate speech in the Valencian Parliament, in which he pledged the government will "continue to work on new tax proposals to help businesses and employment, especially family businesses" in coming weeks.

Image: GVA

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