The Spanish government has approved a new deduction for workers earning the Minimum Interprofessional Wage (SMI), which will require almost three million workers to file tax returns to take advantage of the benefit.
On Tuesday, the Spanish government introduced a new tax deduction of up to 591 euros aimed at workers earning the Minimum Interprofessional Wage (SMI), which is set to increase by 3.1%, bringing it to an annual total of 17,094 euros. This deduction will apply to all salaries less than 20,000 euros annually, with the intention to prevent steep tax rate jumps and ensure a smoother tax transition for lower-income earners.
Despite current regulations in Spain stating that individuals earning less than 22,000 euros are not required to file a tax return, those wishing to take advantage of this new deduction must still submit their declarations. This creates an obligation for an estimated 2.9 million workers, as reported by Gestha, the technicians' union of the Tax Agency, who predict that this change will lead to more individuals navigating the tax filing process to benefit from the financial relief.
Yolanda Díaz, Spain's Minister of Labor, criticized business leader Garamendi, noting that he earns 23 times the SMI, while also announcing this plan to 'democratize' businesses. The new tax measure is positioned as a step towards fairer economic practices and is part of a broader strategy to support low-income workers in Spain, allowing them to retain more of their earnings amidst rising costs of living.
