The sum of the tax cuts announced by the new Valencian government now reaches nearly 365 million euros; In other words, Carlos Mazón's Executive will have 365 million less to balance his budget for next year. A decrease in income that the Valencian Government hopes to compensate with the economic reactivation derived from the implementation of these measures - if taxes are lowered to buy houses, more homes will be bought and more VAT will be invoiced to furnish and condition them, Mazón himself explained - but also in the growth of the Valencian economy.
The Valencian Government, despite the doubts generated by the lack of data from the central Executive, works in a scenario of economic growth in the Valencian Community of between 3 and 5%, which allows the Executive some margin to fulfill some of its electoral promises. Given this positive situation, sources close to the president explained yesterday, not lowering taxes would have been "immorality."
Although it is true that we have not gone as far as we would have liked, the Valencian Executive has tried, in this second announcement of tax cuts, to focus its impact on the lowest incomes. All measures are aimed at this socioeconomic stratum after the announcement of the suppression of the Inheritance and Donation Tax was understood as a nod to the wealthiest, although the PP has always insisted that "the death tax" affects all.
The figures for the impact of the Inheritance and Donations bonus have moved from the nearly 350 that were budgeted for 2023 to the 166 million that the president of the Generalitat counted yesterday at a press conference. Sources from the Ministry of Finance explained to La Vanguardia that, according to data from the Valencian Tax Agency, with the income settled this year until September 17, approximately 105 million have been paid for the Inheritance and Donation Tax in the Valencian Community for the groups I and II (those affected by the change promoted by the PP).
Thus, taking this figure as a reference and extrapolating for the entire year, "the loss in collection could be estimated at 150 million euros." The somewhat higher figure that Mazón indicated is due to the fact that it takes the 2022 settlement as a reference.
To these 166 million of budgetary impact, we must add the 199 million euros that the president announced yesterday for the reductions in the Property Transfer Tax for the purchase of housing and in the deductions for incomes of less than 32,000 euros (48,000 in if joint).
As this newspaper detailed, the Accompaniment Law that must be approved at the end of the year in Les Corts (PP and Vox have an absolute majority), provides for a 25% reduction in the Property Transfer Tax for all young people under 35 years of age who acquire a habitual residence of less than 180,000 euros. This reduction will also be made for purchases of habitual residence under official protection under the general regime when its value is below those 180,000 euros. The housing measures will have an impact, according to the Consell, of 19 million euros.
The taxpayer's pocket will be saved more (and the autonomous Administration will earn less) due to the deductions presented yesterday, which represent savings of between 100 and 150 euros in the income tax return for expenses derived from oral health, mental health, the purchase of glasses or contact lenses and the expenses associated with practicing sports (from gyms to the payment of federation tokens). In these matters, a saving of 180 million euros is estimated for 2.1 million Valencians (87.5% of taxpayers).
Now, the problem for the Department of Finance will be to square everything in a new budget that has to be presented before the end of the month of October.
