The ‘social shield’ reduced the State’s income until November by 5.6 billion

The Government Plans to Announce at the Council of Ministers next Wednesday, December 27, the possible extension (or definitive elimination) of a portion of the anti-crisis measures approved to deal with the strong rise of Los Precias and on which Aoun has not made public his decision. For now, the Executive has extended the application to transportation to all of 2024 and will maintain the VAT reduction on basic foods throughout the first half of the year, giving time for inflation to moderate from the 9% it was in November.

The energy tax reductions also expire on the 31st and the fourth vice president and Minister of Finance and Public Function, María Jesús Montero, has already made it clear that the Government has budgetary margin to “take or extend” some of the measures to combat “The rise in prices if necessary.”

In the absence of knowing how the collection for the month of December evolves, the tax cuts known as the ‘social shield’ have become a loss of income of more than 5.6 billion for the public coffers, according to data from the Monthly Report of November collection made public this Friday by the Tax Agency (AEAT). This points out the “strong impact of rate reductions”, especially in personal income tax and VAT.

Sánchez’s Executive approved a reduction in the VAT on electricity to 5% (from July 2022 it was extended to that level, after having previously lowered it from 21% to 10%), and months later reduced the VAT on electricity to that same rate. gas. In addition, he suspended the Tax on the Value of Electrical Energy Production and set a cap on the price of a butane cylinder of 19.95 euros. He has also maintained the 20 cents per liter reduction in fuel prices, although only for professional groups.

They are those who have coexisted with what is known as the ‘Iberian exception’ or gas cap which, according to the third vice president and minister of measures and minister for the Ecological Transition, Teresa Ribera, will decline on December 31, since the European Commission considers that it is not “it is possible to implement it” beyond that date. Ribera explains that prices have stabilized and are below the levels recorded at the end of last year, when this extraordinary price control instrument came into action.

Organizations such as the Bank of Spain have recorded that the withdrawal of anti-crisis measures, although necessary, will have an impact on prices. Thus, if the aforementioned package were maintained, the annual CPI rate could be lowered to 2.6% next year, when GDP will slow to 1.6% from the 2.4% estimated for this year. The main scenario of the entity, which involves the extension of transport subsidies and the extension of the VAT reduction on food until June, places the general media CPI rate at 3.3% in 2024.

The deficit and income from new taxes.

The State’s budget execution data until November, published on Friday by the AEAT, show how in that period a deficit of 31,627 million euros was accumulated, the equivalent of 2.16% of GDP – practically at the same level as a year ago. anus-. This hole responds to the fact that income increased by 1.2% to 240,796 million, while expenses rose by 1.7%, to 272,423 million.

The VAT reduction on basic foodstuffs and gas, together with the lower inflation rate compared to that recorded a year ago, when prices rose on average to 8.4% for the year as a whole, have become a slight reduction in income from this tax despite the fact that consumption is holding up for the moment – in the third quarter it once again acted as the driving force of the economy.

At the same time, the tax figures that came into force this year have contributed 3,974 million euros in terms of collection, of which the temporary tax on energy companies brought in 1,644 million; the one applied to financial entities another 1,264 million; that of the great fortunes, 622 million; and that of single-use plastic packaging, 444 million more.

Now the Executive is studying what measures to adopt in relation to the tax on energy companies to maintain beyond the next year, as promised in the government pact signed with Sumar, and at the same time calm spirits and reduce conflict with the sector. Thus, the Ministry of Finance is working to ensure that investments in renewable energies are deductible from the base on which the tax is settled, in the process of transforming these companies towards a business model that stops depending on fossil fuels.