The Government has agreed in its last Council of Ministers of the year to extend the extraordinary taxes on banks and energy companies for another year as they are currently in force. However, the Executive plans to introduce in the next General State Budget bill that large energy companies can be deducted from January 1 strategic investments in industrial projects related to decarbonization.
The negotiation on these taxes has been the main problem between the PSOE and Sumar to agree on the omnibus decree with important economic measures. As announced by the President of the Government, Pedro Sánchez, the Government is committed to reviewing both levies so that they become permanent, as the coalition agreed in its legislative agreement.
In the omnibus decree, the Government also includes the revaluation of pensions in accordance with the average CPI as of November, which was 3.8%. It has also agreed to extend the bulk of the measures taken to mitigate the impact of the war in Ukraine.
In this sense, the VAT reduction on basic foods to 0% and 5% for pasta and oil will continue until June. In parallel, the Government withdraws tax cuts related to electricity and gas. In this sense, the VAT on electricity will go from January 1 from 5% to 10%, and it is expected to remain so throughout the year. The tax on the value of electricity production will also increase, which will go to 3.5% until March and 5.25% until June; and the special electricity tax, which will increase to 2.5% in the first quarter of 2024 and 3.8% in the second quarter. The VAT on gas, for its part, will recover 21% starting in April. Sánchez explained that the gradual elimination of tax credits is due to "the gradual fall in energy prices."
In relation to public transport, Sánchez has announced that aid will be maintained as before throughout the year. Therefore, during 2024, the free Cercanías, Rodalies and Media Distancia services will be extended for frequent users, and the General Administration will continue to contribute 30% to reduce urban and interurban means of transport, aid conditional on the communities Self-employed help with an additional 20%.
The Government will also maintain for six more months the discount linked to the social bonus, the limitation of the regulated gas rate (the TUR) and the butane cylinder to 19.55 euros, as well as the suspension of the evictions of vulnerable people with no alternative. housing.
Sánchez has announced two new measures that will be included in the omnibus decree at the end of the year. This involves the elimination of banking fees for older people and people with some type of disability, as well as the transfer of the management of the Minimum Living Income to the autonomous communities that request it.
Sánchez has stated that "the Government will continue the transformative agenda" that it has been implementing in recent years. The coalition Executive, he added, "will never abdicate its main task: protecting citizens with courageous measures when and where necessary."
The president concluded his speech by assuring that "there is no dichotomy between social justice and economic growth." We can grow with social justice," he added.
