New fiscal blow from the Government: 2025 brings 12 tax increases that will cost 371 euros to each home

The voracity of Pedro Sánchez’s Government continues unsatisfied and the year 2025 will come with an extraordinary tax increase on companies’ coffers and families’ pockets of almost 18,000 million euros. The increase in fiscal pressure hardly gives any respite, which will place us on the podium of the countries in which the weight of taxation has increased the most, already exceeding 37.3% of GDP with which 2023 closed, according to OECD data. During these 13 years, taxes and social contributions grew in Spain by more than six points of GDP. And what remains to come.

Since 2018, the year in which Pedro Sánchez arrived at La Moncloa, more than one tax has been created or raised every month, adding 93 tax and contribution increases, for a total of almost 42,000 million of accumulated impact of the tax increases. taxes and contributions between 2019 and 2023, equivalent to about 2,200 euros per household. A figure to which we must add what is coming in the year 2025, in which the Minister of Finance, María Jesús Montero, intends to increase tax collection by more than 7,000 million, which would be equivalent to 371 euros per home, according to calculations. the Juan de Mariana Institute.

To this we must add the increases in contributions, which will boost Social Security income by 6.5% thanks to the increase in the maximum bases of 1.2 million workers; the percentage increase in the intergenerational equity mechanism (MEI), which will mean an average of 215 euros for companies and workers; and the solidarity fee, which will total between 550 euros and 1,100 euros per year in cost – 83% must be borne by the company and 17% by the employee. In total, according to ministerial sources, the increase in collection from social contributions would exceed 177.3 billion euros, almost 11% of GDP and 6.5% more than in 2024, which means 10.9 billion more. That is, a new “stick” to homes and companies of almost 18,000 million.

Between the taxes that recover their tax caliber after the stoppage of the pandemic and the crisis in Ukraine and the new tax figures, the pressure and fiscal effort will increase again in 2025, the year in which the Government has put the table 46 collection measures, of which 12 modifications have ended up being successful.

For much of 2024, basic foods had 0% VAT applied, but as of January 1, this VAT will return – depending on the type of food – to 4%, 7.5% or 10% as appropriate. .

Another expense that will increase will be the electricity bill. From 2022, the VAT on electricity stood at 10% on contracts of less than 10 kilowatts as long as the wholesale market exceeded 45 euros per megawatt hour. But this reduction will be eliminated by 2025, reestablishing the VAT at 21%.

Buyers of electric cars will no longer be able to benefit from the 15% personal income tax deduction that until 2024 applied to the purchase of this type of vehicle, with a maximum of 20,000 euros. Key tax incentives for sustainable mobility are also eliminated, such as the deduction for the installation of charging points in homes.

Likewise, personal income tax deductions for renovations that reduce energy consumption in homes come to an end, allowing up to 20% of the cost to be deducted – with a maximum of 5,000 euros – if the renovation achieved savings of 7%, and 40 % of the cost – with a maximum of 7,500 euros – if the savings reached 30%.

In addition, new taxes arrive and others rise suddenly. The new garbage tax, which will begin to be applied in April 2025, will affect municipalities with more than 5,000 inhabitants. Those who already paid it will do so for a much higher amount and those who were not obliged will now pay.

Liquids for electronic cigarettes and “vapers” will begin to be taxed like conventional tobacco within the Special Taxes. This increase will affect both sellers and consumers, since being a tax directed at sales companies, they will increase the prices of the products. The amount to contribute will vary depending on the town hall between 150 and 200 euros.

Regarding the tax on banking and energy, the Executive’s intention is for them to be permanent. Thus, the tax on the interest margin and commissions of financial entities will tax credit institutions with progressive rates of up to 7% on tax bases exceeding 5,000 million euros. And it will not be deductible in corporate tax. The temporary tax on the profits of energy companies is more up in the air, since the Government had to use a legal subterfuge to withdraw it first and then approve it in the Council of Ministers by decree law. It is pending approval by Congress, with doubts from both the partners on the left and those on the right.

Regarding personal income tax, it will rise from 28% to 30% for those incomes that exceed 300,000 euros of profits per year, affecting income generated by deposits, dividends, insurance and property sales. SMEs will see their tax rate reduced from 25% to 20%. However, large companies that make profits abroad will be taxed more.

These tax measures “will increase the tax bill of families and companies, which generates uncertainty, high costs and worrying legal uncertainty.” This is warned by the Registry of Tax Advisors (Reaf) of the College of Economists, who warn that this increase in tax pressure, added to the loss of purchasing power due to the lack of updating of some elements of personal income tax – whose general rate continues without deflation–, the increase in contributions and the reduction of tax deductions “will weigh down domestic and business economies.” Furthermore, they harshly criticize the “legislative technique” used by the Executive, by implementing a series of new taxes a few days before the end of the year, since it generates “a situation of little legal security and uncertainty”, in addition to conditioning their decisions. for political reasons.

According to the Juan de Mariana Institute, under the mandate of Pedro Sánchez, taxes have not been adjusted to take into account the increase in inflation, which has accumulated an increase of close to 19% under his mandate. Only between 2019 and 2023, the impact of the non-deflation of taxes dependent on the central government has been a hidden increase in taxes valued at 27.1 billion. Spain is the third country in the European Union that has increased its tax pressure the most since Sánchez came to power in 2018, until last year 2023. The increase has been 2.9 points of GDP, in marked contrast to the reduction in 0.8% appreciated in the EU-27. The Government has adopted 93 tax increases. In 2019, 11 collection measures were adopted, followed by 12 in 2020, 20 in 2021, 10 in 2022, 17 in 2023, 11 in 2024. Finally, there will be 12 by 2025.