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Economists fear the tax cuts in Spain

Economists fear the tax cuts in SpainTax cuts in Spain threatens the growth of the deficit, which raises concerns in financial markets against the backdrop of a difficult economic situation in Portugal.

According to Bloomberg News survey of more than 60% of economists believe that the reduction of income and corporate taxes, planned premier of Spain Mariano Rajoy, a negative impact on the fight against the budget deficit and debt burden, which is 100% of GDP.

“The Government should continue to fight the budget deficit – said Timo del Carpio, an economist at RBC Capital Markets. – While the macroeconomic situation is constantly improving, there are some chances that the deflationary shock because of weak economic growth and return to the path Spain increase in debt. ”

Spanish authorities plan to reduce personal income and corporate taxes in 2015-2016. with a view to spur consumer spending and investment in the economy.

Income tax will fall by an average of 13%, while the tax payments of the Spaniards, whose income is less than 24 thousand euros per year, will be reduced in 2016 by 23%, said Deputy Prime Minister Soraya Saenz de Spain Santamaria.

Under the plan approved by the Spanish government the highest income tax rate for 2016 will be reduced to 47% from 52%, the lowest – to 19% from 24%. The government will increase the tax benefits for certain categories of citizens.

Corporate tax in 2015 will rise to 28% from 30%, and in 2016 will drop to 25%.

Terms: economic growth, markets, Tax
Category: News