Ministers line up to present the budget plan on Tuesday this week. / EP

Ministers plan a 'solidarity' levy for 2023 and to take more low earners out of tax

As part of its Budget proposal for 2023, the government expects to raise 7.7 per cent more in taxation but with no general rate increase

SUR MADRID.

While the government announced more details of its spending plans for 2023 this week, it had already given an early indication last week of what changes it wanted to make to taxation in order to help pay for it all.

Besides income from loans and other sources, ministers expect to collect almost 263 billion euros in taxes in 2023 and they do not plan to make tax increases across the board.

Excluding Social Security payments coming in from workers' wages, the government is forecasting a 7.7% increase in tax revenue (equivalent to 18.7 billion euros) next year, as inflation drives prices and wages up.

The government will introduce a temporary "solidarity tax" on people with net assets over three million euros and an increase in tax on capital income of more than 200,000 and 300,000 euros.

This has been designed in part to counter different regions' recent reduction in their local wealth tax, which had angered ministers. The opposition PP party thinks the new wealth tax move will be counterproductive.

Lower earners in work with under 21,000 income will see entitlement to more reductions and the tax free threshold for income in Spain will rise to 15,000 euros a year for 2023.

Company tax on firms turning over less than one million euros will also drop from 25% to 23%.