The President of the Government, Marga Prohens, today announced a reduction in personal income tax in the Balearic Islands included in the approval of the General Budget of the islands for the year 2024. This will extend the tax reform launched last July with the elimination and reduction of Inheritance Tax (ISD) and Transfer Tax (ITP). This reduction in personal income tax in the Balearic Islands means paying 0.5% less for middle and low incomes. The objective, according to the regional administration, is to increase the disposable income of the citizens of the Balearic Islands.
Thus, middle and low incomes, those equal to or less than 30,000 euros, will see the applicable rate of Personal Income Tax reduced by 0.5 points. On the other hand, the reduction in the tax burden for incomes equal to or higher than 30,001 euros will be 0.25 points.
This measure will save citizens 45 million euros a year, according to the Government, if the average of the calculation is taken from the maximum and minimum bases of each bracket. The tax reform is especially focused on middle and low incomes. In fact, three out of every four taxpayers are below 30,000 euros per year, which means that the vast majority of the population of the Balearic Islands will benefit from the reduction in personal income tax in the Balearics.
In this way, the Government continues with its intention to enable citizens to cope with the persistence of inflation and the economic uncertainty caused by the international context. The sum of the savings from the elimination of the ISD, the ITP and now the reduction of the IRPF reaches 120 million euros per year. All this, with a spending ceiling and general regional budgets that increase public spending on essential public services, such as education, health and social services.
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