The PP will abstain on the decree with tax cuts due to the Iran war

MadridIt was no longer decisive, but its vote was one of the last unknowns in the vote on the decree with tax reductions due to the Iran war that Congress will approve this Thursday. The PP plans to abstain, according to Popular sources. However, Alberto Núñez Feijóo's party still leaves the door open to a vote in favor if there is a last-minute shift by the Spanish government. What would have to happen? That Pedro Sánchez's executive commits during the parliamentary debate to deflating personal income tax (IRPF). A scenario that has not occurred during the intervention of the Minister of Economy, Carlos Cuerpo, who has defended that the decree is already "the most ambitious" he has proposed throughout the legislature. In contrast, for the PP, the package of measures approved last Friday by the Council of Ministers is still "insufficient". However, they will not vote against it because "it includes part of its proposal for tax cuts". Nor will they vote in favor because they want even more.The PP, in fact, already sent a letter to the Spanish government this Monday demanding that "the IRPF tariff be adjusted" to compensate for the effect of inflation. In a response sent the following day, also by letter, Sánchez's executive did not take up the challenge and reaffirmed the correctness of its approach, which amounts to about 5 billion euros in aid and tax incentives. Despite not having accepted this condition from the PP, Cuerpo has stressed that the decree has been drawn up through dialogue with parties, social agents, and experts and "has benefited from their contributions". Among the measures, the tax reduction on VAT (from 21% to 10%) and the special tax (IEH) applied to gasoline and diesel stands out.During the three months of the measure's validity (until June 2026), Funcas has calculated that the measure will have a revenue cost of 1,055.6 million euros, according to an analysis published this Thursday by the think tank. The bulk of this money is due to the VAT reduction. The average household savings will be 90 euros during the three months the tax reduction is in effect, according to Funcas's calculations. In any case, it will not affect everyone equally. The organization again warns that this type of measure is "regressive".

reports Nuria Rius Montaner

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The Spanish government has had peace of mind for a couple of days that this plan will pass the lower house filter, necessary for these measures to remain in force, because Junts has already announced that it will vote in favor. The condition that Carles Puigdemont's party set for the PSOE to give its support has been met. In a vote also this Thursday, prior to the decree, the socialists voted 'yes' to a point in a non-law proposal by the juntaires that calls for exempting VAT for self-employed workers who invoice less than 85,000 euros. This part of the PNL has received almost unanimous support from Congress, with the only disagreement from Podemos —against— and EH Bildu —abstention—.

Thus, the PP's abstention on tax cuts gives the Spanish government even more breathing room, despite the fact that the decree was no longer in danger, unlike the extension of rental contracts for two years, which still has no voting date due to this lack of support.