The government sent its 2023 budget plan to the European Commission on Saturday, including an optimistic forecast of an additional 10 billion euros thanks to the additional tax collection expected by the executive.
The progressive executive forged by the socialist party PSOE (S&D) and the left Unidas Podemos (United We Can/GUE-NGL) is working with two possible economic scenarios for next year: a more cautious one, and another more optimistic, partner from EURACTIV EFE reported.
The extra money planned would increase the government’s spending room strengthen social measures intended to help vulnerable citizens to mitigate the increase in energy prices resulting from the war in Ukraine.
“The (additional) fiscal space should be used to expand and adopt the measures deemed most appropriate to protect the families, workers and businesses most affected by the energy crisis,” official sources told Reuters. Ministry of Finance declared.
The 2023 Budget Plan sent to Brussels provides for the first scenario with revenues for the national public administration representing 42.3% of the Spanish Gross Domestic Product (GDP): 587,609 million euros in total, announced Spanish public television. RTVE reported.
On the general state expenditure side, it forecasts 47.1% of GDP in 2022 and 46.2% in 2023. In this first hypothesis, the additional 10 billion euros of tax collection are already included.
The second scenario envisages a “better than expected revenue starting point in 2022, based on the good results of the regulation of personal income tax (IRPF) and corporate tax (Impuesto de Sociedades) due to the dynamism of employment and the solidity of economic growth,” underlined government sources.
Total state revenue would represent 43% of GDP, or 597 million euros. As for taxes, the Spanish government plans an increase from 344.627 billion euros to 354.283 billion euros: an additional 9.656 billion euros for the Treasury.
In a second scenario, spending would reach 47.9% of GDP in 2022 and 46.9% in 2023.
In May 2023, Spain will hold municipal elections, seen as the first litmus test for Prime Minister Pedro Sanchez’s coalition government with Unidas Podemos. After that, the parties will face general elections scheduled for December next year.
(Fernando Heller | EuroEFE.EURACTIV.es)
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