The Spanish coalition government plans to temporarily increase the rate to 1% on the country’s richest, in addition to their tax on surplus earnings from energy companies and banks.
“We are proposing a redistribution of effort among those who have the most so that they contribute to reinforcing what belongs to everyone, which is the welfare state”expressed the President of the Government, Pedro Sánchez.
READ ALSO: BPI predicts that the increase in the price of electricity will damage production
The Minister of Finance, María Jesús Montero, argued that the measure is aimed only at millionaires. The increase in tax revenue will be used to alleviate the economic downturn due to rising energy and food prices. The rate of inflation annual increase to 10.5% last month.
However, the government said it is still calculating the exact increase and scope of the tax measure.
Likewise, the minor partner of the Socialists in the coalition, United We Can, press to make the new tax permanent.
The highest income tax rate for those earning over €300,000 a year is 47%, The highest capital gains tax is 26%.
However, regional governments have some leeway on taxes, and some of them, led by the right-wing Popular Party, the main opposition party, have cut taxes, saying the move boosts growth.
The debate and vote legislation on the government proposal is scheduled for the next few weeks.