The next income tax return of Madrid residents will go back, for the second consecutive year, with a deflation of the Personal Income Tax (IRPF) framed as the central axis of the liberal policies of the regional president, Isabel Díaz Ayuso, who argues that this measure will save 153 million euros for the 3.5 million taxpayers.
Sources from the Ministry of Economy, Finance and Employment have detailed that they have already begun processing it so that it is in force in the next income tax return, corresponding to 2023. They have also stressed that the objective is to "help families in the face of the price increases".
The 2023 deflation on the regional personal income tax scale will be applying 3.1% to all sections, the personal and family minimum, current deductions and their income limit. The regional Executive has highlighted that this measure "will prevent salary increases from resulting in higher tax payments."
"With this fiscal initiative we fulfill a commitment included in the electoral program and that will continue to benefit taxpayers as long as inflation is above 2%," sources from Sol have defended.
The Draft Deflation Law was published this Monday on the regional Transparency Portal for the public consultation period, as an initial step before submitting it to the Government Council for approval.
Once this approval is received, the text will be sent to the Assembly, where the regional government has an absolute majority, for processing prior to its entry into force. The objective is for it to come into effect this year and for families to be able to benefit from this tax reduction in the next income tax return in 2024.
The percentage on which the deflation will be carried out will be 3.1%, which corresponds to the average rise in the Consumer Price Index (CPI) during the first eight months of 2023.
With this measure, the Community of Madrid becomes the first common regime region to approve deflation for two consecutive years and thus especially benefit the lowest incomes. The global savings for taxpayers in these two years will amount to more than 350 million euros.
