Wednesday, July 6

Blanco-Morales rejects lowering taxes to ensure public services

Appearance of the Minister of Finance in the Assembly. / M. Romero

PP and Ciudadanos demand measures to mitigate the effect of inflation on public accounts and society

John Soriano

The Junta de Extremadura rejects new tax cuts, since it considers that the loss of income may affect the quality of public services. The first vice president of the regional government and Minister of Finance, Pilar Blanco-Morales, has indicated in the Assembly that combating inflation through tax cuts would be a mistake “that the usual people would pay, those who most need strong public services.”

In an appearance at the request of PP and Ciudadanos, Blanco-Morales has recognized the importance of the increase in prices in the public coffers and in economic activity, but he trusts the measures that have already been adopted and the strength of the recovery after the pandemic.

The popular deputy Luis Alfonso Hernández Carrón has stressed that prices are rising in the region above the national average and that in March they grew by more than 10% compared to the same month of the previous year. However, the Junta de Extremadura has not made any assessment of the effect on public coffers. Likewise, he has underlined that the regional Administration had more income than expenses last year, despite which it did not execute the funds for investments and also increased the debt.

For his part, José María Casares, from Ciudadanos, has indicated that the increase in prices supposes an extra cost and therefore will have an effect on the regional accounts, especially in terms of investments. He has also stressed that growth forecasts are in question. “The budget has been born dead,” he assured. Meanwhile, inflation allows tax collection to increase, which is why it calls for measures for families and companies.

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The Minister of the Treasury has stressed the effect of the war in Ukraine on the cost of raw materials, which has consequences for public accounts and for society. But she has recalled that the Board has already made decisions, among which are the measures to guarantee the viability of its hiring and the reduction of the donation tax.

He has also pointed out that the growth forecasts contained in the 2022 Budgets were prudent, so their downward revision will not have as much impact. Likewise, he has underlined the improvement in employment, with the reduction of unemployment and the increase in affiliation, and the positive consequences of the labor reform. And he has highlighted the good data on the deficit and the containment of the debt. “Although worrying in its magnitude, the rise in prices has not nullified the growth potential of our economy,” he added.

Regarding taxes, he stated that “no government makes a fortune with the collection” and pointed out that the increase in income from personal income tax, VAT and corporate tax is due above all to the economic recovery. In any case, he has recalled the impact of the reductions approved by the Government to mitigate the rise in the price of electricity and fuel.

For all these reasons, Blanco-Morales has shown his rejection of a tax cut that could put the financing of public services at risk. The regional government does not rule out taking measures, but conditional on their effectiveness and their impact on public coffers.

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The Minister of the Treasury has sent a message of calm, since the Board has mechanisms such as credit modifications to adapt their accounts. Likewise, she has recalled that deliveries on account of the regional financing system are guaranteed, to which is added the arrival of recovery funds to face investments. And finally, she has affirmed that the principles of the regional government go through consolidating the recovery and that it reaches all citizens, for which “public leadership in the face of the crisis” is necessary.

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