The Minister of Finance distances herself from the drop in Puig's personal income tax but accuses the PP of causing a downward domino effect

MADRID, 27 Sep. (EUROPA PRESS) -

The Minister of Finance, María Jesús Montero, has distanced herself this Tuesday from the reduction of taxes via personal income tax announced by the socialist president of the Valencian Community, Ximo Puig, although she has accused the PP of doing fiscal dumping and generating a domino effect to the low that forces other communities to reduce their taxes so as not to be in a worse position.

In an interview on Onda Madrid, collected by Europa Press, the head of the Treasury has pointed out that the communities governed by the PP are taking the lead in lowering taxes, in reference to the reductions in personal income tax and the elimination of the tax on heritage recently announced.

Thus, he has pointed out that these measures of the PP - which he has described as "fiscal dumping" - are causing other autonomous communities to be "forced, obliged or invited" to lower taxes so as not to be "in a worse position" with respect to others. At this point he has mentioned the Community of Madrid that benefits from the "capital effect", as he has argued.

In this way, he has pointed out that the tax reductions announced by the PP cause a "domino effect" that causes a "fiscal hollowing out". "It is not good that the Autonomous Communities begin this spiral", he has indicated, and that "they are forced to do something they do not even want, to compete with others", he added.

The president of the Valencian Community announced on Monday some tax measures that will benefit citizens who earn less than 60,000 euros a year: a 10% increase in the amount exempt from taxation for all Valencians, a new regional IRPF rate for 2022 with new sections adapted to inflation, and a 10% increase in all tax deductions and rebates.

At this point, when asked directly if she had not liked Puig's decision, Montero indicated that she had been "clear" in her response and then indicated that the Government had already been warning that the tax cuts and "contagion " that it could provoke in other regions was a situation that "does not make sense".

In this line, the minister has pointed out that it makes no sense for an autonomous community to lower taxes and then ask for more resources from the Government of Spain. In the same way, he has rejected that Spain is requesting resources from the European Union --"140,000 million of mutualized debt that all Europeans pay", in reference to the recovery funds, as he recalled-- and that later the collection is lowered within its tax jurisdiction.

Therefore, he has asked to be "coherent" in order to seek the well-being of the majority of the country's citizens and the efficiency of the economy. "It makes no sense to do one thing with one hand and the other with the other," she reiterated.