Inflation: check for 200 euros, VAT reduction on electricity, 50% discount on transport… The anti-crisis measures of our Spanish neighbors

Inflation: check for 200 euros, VAT reduction on electricity, 50% discount on transport… The anti-crisis measures of our Spanish neighbors

To counter rising prices, the Spanish government is launching a massive aid plan. The announcement was made last Saturday. Catalonia, like some regions, has indicated that it wants to supplement certain aid. The Spanish state will therefore have to spend 9 billion euros. This will keep inflation within 3.5%…

A 50% reduction in public transport season tickets

A 50% drop will be observed on public transport subscriptions. This will be effective from September 1. As for other subscriptions managed by local authorities, aid of 30% of the price will be provided. Aid which will be supplemented by Catalonia in order to reach 50% on regional transport.

5% VAT on electricity

VAT on electricity prices will experience another revaluation this year. This was announced by the Spanish government. But not only, since the drop in the price of a liter of fuel will be extended by 20 cents. VAT on electricity prices will therefore drop from 10% to 5%. In Spain, this is the second time that VAT on electricity has been reduced this year. Previously, it was 21%.

A check for 200 euros for the most deprived

The self-employed, low-income workers and the unemployed will receive direct aid according to Pedro Sanchez. This direct aid will take the form of a check for 200 euros. In addition, the price of butane cylinders is also going to see a change.

Indeed, a maximum price will be set by the government. This kind of aid has already been applied in other European countries such as France, Germany or Italy and the United Kingdom. Spain is therefore added to the list.

Payment of company social security contributions, deferred

In addition to these aids mentioned above, several others were declared by the Spanish government this Saturday. The payment of social security contributions for companies in the fisheries and livestock sectors will therefore be postponed.

Remember that these companies are affected by the war. Spain has also maintained the 4% VAT reduction for surgical masks. But before applying them, the Spanish congress, which will take place in a few days, will have to validate these aids.

15 billion euros in aid until December 31, 2022

This aid plan announced by the Spanish government is the second measure taken this year to combat inflation. Indeed, last March, the government has already decreed aid of 6 billion euros. Aid that was only to last three months. That is until June 30.

This period will ultimately have to be extended for the next 6 months. With the 9 billion euros announced this Saturday, June 25, this will make a total of 15 billion euros in aid until the end of this year. This sum represents more than one point of Spain’s GDP, according to Pablo Sanchez.

A figure never known for 37 years in Spain

Note that a 15% increase in pensions and disability pensions was also decided by the executive. In May, inflation in Spain reached 8.7% over one year. This represents 0.4 points more than in April according to the estimate of INE, the national statistics institute in Spain.

Note that in March, inflation reached a peak of 9.8%. For 37 years, Spain has never experienced such a high inflation rate. In April, a slight decline was observed. The statistic went down to 8.3%. Which was a bit of hope.

In Europe, inflation is extraordinarily high according to the remarks of the Spanish Prime Minister. This is therefore the reason for this outbreak of inflation in Spain. He also said that 17 countries in the European Union have higher inflation than Spain.

An additional tax for energy companies

It has also been decided that taxes will be raised on the extraordinary profits of gas, electricity and oil energy companies. This is a new tax that will come into force in January 2023. This will be applied to the profits of the financial year of this year. According to what is being said within the government, this is a measure aimed at spreading the burden of inflation.

“It is normal that the sectors that have benefited the most from the rise in energy prices will see their tax burden increase,” it was explained.

The Minister for Ecological Transition and consumer associations have been calling for this additional tax for almost a year now.

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