AIReF asks Andalusia, Community of Madrid and Aragon to defer their tax breaks or seek other income

• Taxes.Hacienda wants to end the tax reduction of up to 5,000 million in the Community of Madrid

The Independent Authority of Fiscal Responsibility (AIReF) asks the Community of Madrid, Andalusia and Aragon not to apply the tax reductions they have planned since "it may not be a time to apply fiscal measures ".

These three regions include tax actions, mainly " deductions in personal income tax and bonuses in inheritance and donations " that, in one way or another, affect the accounts of 2020. In the case of Madrid, for example, tax rebates of the regional government are already in force mostly in this year, but from the AIReF explain that "some of them have an additional impact in 2020".

In Madrid "there is a forecast of higher than average spending growth , mainly 4% more in personnel, and also a tax reduction that undermines its financing capacity" and in "Andalusia presents a high risk of breach of the spending rule , which is derived from tax reduction measures, "AIReF sources detail.

Therefore, the Fiscal Authority, which today has presented its report on the fundamental lines of budgets of local communities and corporations by 2020, considers it of great importance that these actions be postponed in the tax field which, on the other hand, are some of the Great promises from these regions. In fact, the Community of Madrid, with its president, Isabel Díaz Ayuso, at the head, is immersed in a fiscal war with the Ministry of Finance and its acting head, María Jesús Montero.

Both crossed numerous reproaches and accusations before the elections, and if Montero finally stays in the Treasury, as everything indicates, the clashes will reproduce in the coming months or even years.

Search for new ways

In any case, and if Madrid, Andalusia or Aragon decide to keep their tax rebates, AIReF asks them to look for ways to balance their finances. " To propose other actions that favor compliance with fiscal rules and the consolidation process ." The Fiscal Authority does not detail what these measures could be, but they should be actions that would allow obtaining new resources, so there would only be two ways: either raising other taxes or reducing expenses .

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