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Madrid will deflate the personal income tax rate according to the average increase in wages and not with inflation

MADRID, 25 May.

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Madrid will deflate the personal income tax rate according to the average increase in wages and not with inflation

MADRID, 25 May. (EUROPA PRESS) -

The Government of the Community will deflate the regional income tax rate in accordance with the average growth of wages in the region, as clarified by the Minister of Finance, Economy and Employment, Javier Fernández-Lasquetty, in the press conference after the Council of Government.

The president of Madrid, Isabel Díaz Ayuso, announced on Monday that the Executive would promote this measure to "counteract the fiscal effects of the rise in prices and wages that is taking place due to the current economic situation." The goal is for it to come into force in January 2023.

"The criterion that we will follow in the average increase in wages in this year 2022. It seems to us that it is what best responds to what is technically deflation, which is to prevent wage growth from displacing the taxpayer's income from one bracket to another and make him pay not only more taxes but a higher percentage of taxes", specified the counselor, at the Royal Post Office, thus ruling out that it will be done according to inflation, well above the salary increase.

In fact, the wages agreed in collective agreements, both company and sectoral, rose by an average of 2.4% until April, with hardly any changes compared to March (2.36%) and well below the increase in prices, since the inflation data for the fourth month of the year stood at 8.3%.