The Tax Office confirms the different impact on the tax cuts depending on each municipality and that the capital is the one with the lowest expenditure per inhabitant on public services
The Autonomous Communities have sufficient capacity to reduce the tax burden of their citizens through tax breaks, but this implies a more or less significant loss of income, depending on the community and its characteristics. In the case of the Community of Madrid, one of the most tax beneficiaries, the loss of revenue from this economic policy represents a reduction of 1.87% of its GDP, while the national average is 0.67%. .
This data comes from the tool to compare economic indicators of the Autonomous Communities that the Fiscal Authority (Airef) updated this Monday with new values of expenditure and income. This update is published in the middle of the debate on the reform of the regional financing system to get a picture of the real situation of each autonomy, a “complete vision”, according to Airef sources. The “Interactive Observatory of Autonomous Communities” tool, openly available to anyone who wishes to consult it on the Airef website, makes it possible to compare the different forms of management of the powers of the communities through homogenized series.
In the case of the Community of Madrid, the fact that their tax capacity is being exercised upwards is striking, which can be understood as the additional revenue that Airef estimates they obtain with their fiscal policy is 0.07%, well below the national average (0.63%) and from other communities such as Catalonia (1.13%), Comunidad Valenciana (0.89%) or Andalusia (0.65%), all above average.
And that in the income chapter, but there are also important differences in expenditure. The data confirms that the Community of Madrid is the least per capita spender on basic public services (education, health and social services, according to the Airef tool), with only €2,920 per capita, compared to €3,197 for the national average, 9% more.
Also far from the communities with the highest expenditure per capita on public services, namely Navarre in first place, with 3,963 euros per inhabitant, 1,000 euros above Madrid, the Basque Country (3,741 euros per capita) and Cantabria ( 3,476).
On the other hand, the INE released the regional accounts this Monday and the data shows that the communities that grew the most in 2021 were the Balearic Islands (10.7%) and the Canary Islands (7%). They are the two who also saw their GDP fall more in 2020 due to the pandemic and the shutdown of tourism. Navarre, with an increase of 5.9%, and Catalonia, with 5.8%, were also above average (5.5%).
At the other extreme, Castilla y León (4.3%) and Aragón (4.4%) made the least progress in 2021. In the autonomous cities of Ceuta and Melilla, GDP growth was even slightly lower, at 4% respectively and 4.1%.
In terms of regional GDP per capita, the Community of Madrid leads with EUR 34,821 per capita, followed by the Basque Country (32,925) and Navarre (31,024). The national average was 25,498 euros per inhabitant, 7,000 euros below the European average. The regions at the bottom are Andalusia, with 18,906 euros per inhabitant, the Canary Islands (18,990) and Extremadura (19,072).
Source: La Verdad
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
