One of the government’s major goals in its new 2023-2026 stability program is to reduce the government deficit to 3% of GDP as early as 2024 – one year ahead of schedule – and continue on the path of fiscal consolidation until the figure is exited at 2.5% at the end of the period. Public debt would fall by 100% in 2024. As in recent years, revenues will be the key to achieving the target, with no additional adjustment measures proposed by the government to Brussels to reduce spending beyond what would be achieved when aid from the crisis response plans are scrapped. In its new roadmap, the College calculates that, albeit in a more moderate manner, revenues through taxes will continue to grow year on year to 425,240 million euros in 2026. The figure implies that the State expects 66,160 million euros more in the next three years (2024-2026), from the estimate indicating that they will be around €359,080 million this year. “Even with moderate inflation rates, income continues to grow as the economy grows,” the Executive writes in the document. In fact, by 2026, total government revenue is expected to reach a record €704,391 million, compared to the €611,907 million projected for 2023, increasing the percentage of government revenue to GDP from 43.4% in 2023 to 43.8%. % in 2026. For another year, the government entrusts the entire fiscal consolidation trajectory to economic growth and an improvement in the labor market. And not just this year. The executive estimates that the weight of government spending on GDP will moderate to 46.3% in 2024, once the situation has normalized due to the Covid crisis and the war in Ukraine, “to remain constant until 2026”. In addition to the economic improvement boosting corporate or personal tax collection, the state will also introduce temporary taxes on banking, energy, or large fortunes this year. But it will also maintain until the end of the year the reduction of VAT on electricity and the expenditure of part of the inflation support, 13.3% more than in 2022, but less than the 14.7% increase that will be seen in 2022 was achieved compared to 2021. will be the item that has the highest growth this year. For the period 2024-2026, the collection of personal income tax, wealth tax and other taxes is expected to slow down throughout the period. Thus, it predicts a growth rate of 8%, 7.4% and 6.5% for 2024, 2025 and 2026 respectively, reaching the figure of 230,396 million euros at the end of the series, compared to the 201,377 million euros predicted for 2024 is estimated With regard to corporate income tax, the government foresees a “more dynamic” behavior in 2023 than that of personal income tax and that in 2022, not only due to the estimated evolution of corporate profits, but also due to the impact of the measures taken by the executive power. For the next few years, according to the same cyclical profile of employee compensation and employment, personal income tax collection and non-resident tax collection will lose momentum, but this slowdown in income growth will be even more “pronounced”. » in the case of corporate income tax. On the contrary, the estimate of the collection of Taxes on Production and Imports will show a different pattern according to the Executive’s projections. The growth for 2023 is estimated at 4.6%, lower than calculated for personal income tax, wealth tax and others, to a total of 167,576 million euros. However, revenues from taxes on production and imports will experience a “significant rebound” in 2024, growing from 4.6% growth in 2023 to a 6.8% increase in 2024, before slowing to 2.8% in 2024. 2025 and 3% in 2026. These percentages mean reaching EUR 189,490 million in 2026, compared to EUR 178,927 million in 2024. The government also foresees a growth in social contributions from the 9% in 2023, to 13.9% of GDP, thanks to the good employment performance, the improvement of contract conditions as a result of the labor reform and the increase in the minimum inter-professional wage. For 2024-2026, the Executive calculates that premium income will represent 14% of GDP.
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.
