Spanish government planning to raise income tax

In a recent interview the Minister for Public Works, said that the government would look at ways of raising income tax for high earners in its tax review due to take place in the autumn.

According to Blanco the details of who will have to pay more and how much more will soon be made public. He said that when the budget plans for 2011 are drawn up people will know what the government is planning to do.

Blanco also said that in terms of public services and infrastructure tax rates were currently quite low in Spain compared to other European countries. He added that what people needed to remember is that if they want first class public services and infrastructure then tax rates needed to be similar to those in other European countries.

The government has made no secret of its intentions to raise tax levels for the highest earners, something which it has confirmed on several occasions. However, until now it has remained unclear how this would affect income tax.

In the ‘State of the Nation’ debate in July the Spanish President said that if it was necessary to ask people living in Spain to make a special effort then he would do this.

Although he said that this effort would be directed at high earners.

During the debate Zapatero also said that it was currently just an idea to ask those with a ‘high economic capacity to contribute more. However, although since then no details of the government’s plans have bee released the third Vice President Manuel Chaves confirmed at the beginning of August that the government was still looking at the possibility of raising taxes for the richest in society.

According to Chaves the government was ‘studying raising taxes for those sectors of society with the highest levels of income’ adding that the proposals would be published when they were ready.