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A tax break is on the way for Spain's agricultural sector as it battles drought. R. Gutiérrez
Spanish government reveals tax breaks for farmers battling effects of drought

Spanish government reveals tax breaks for farmers battling effects of drought

The scheme will result in a reduction of 1.8 billion euros in taxes for the sector most affected by the war in Ukraine and the lack of rain

Edurne Martínez

Madrid

Friday, 28 April 2023, 12:35

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Tax relief is on the way for workers in Spain's agricultural sector due to the drought crisis affecting crops and livestock farms.

The Ministry of Finance this week revealed a plan to reduce taxes for farmers would result in a reduction of 1.8 billion euros in taxes for the sector most affected by a rise in costs due to the war in Ukraine, and drought.

About 828,000 professionals are expected to get a 25% tax cut in their 2022 income tax return, due this year. This reduction would then increase to 30 or 50%, in some of the most vulnerable sectors.

For example, olive or almond tree farmers, or beekeepers would benefit from a 50% cut, while all livestock farmers and those cultivating cereals, oilseeds and legumes, chestnuts, peaches, nectarines and apricots would receive a 30% tax cut. The scheme would also subsidise the purchase of agricultural diesel and fertilisers.

In parliament this week Minister for Agriculture Luis Planas also said the government had asked the European Commission to activate the crisis reserve of the Common Agricultural Policy (CAP), which would mean "greater budgetary support" from Europe for the Spanish countryside.

"The situation in Spain is much more acute than in other European countries, so we hope to have a response from the Commission soon to this exceptional circumstance," he said.

The union of small farmers and stockbreeders (UPA) said the tax aid scheme was “a first small step” and claimed it was one of the measures they had proposed to the government.

"The tax reduction of 1.8 billion is not insignificant," it said in a statement, in which italso pointed out that losses caused by the drought "will far exceed those 1.8 billion".

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