The State closed 2025 with the lowest public deficit since the outbreak of the financial crisis of 2008, thanks to a new historic record in tax collection, as reported this Tuesday by the Ministry of Finance.

Politics shouldn't be all about pronouncements and grand gestures. Pragmatism is also essential. In short, it's about being practical so that citizens, those governed, feel they aren't being abandoned when times get tough. And this seems to be the path the Spanish government has taken with the package of measures designed to mitigate the effects of the war in the Middle East. The conflict, whose end appears far off, has driven up gas and oil prices and, consequently, the prices of everything related to them, such as fuel and electricity. That's why the measures announced by Pedro Sánchez will amount to around 5 billion euros, far less than the more than 20 billion mobilized in 2022 following the invasion of Ukraine—but we are still in the early stages and don't know how long the war might last. The first decree focuses on reducing energy taxes, one of the services most affected by the impact of the Middle East crisis, and one that could have ripple effects throughout the economy. In addition to lowering the VAT on electricity and gas from the current 21% to 10%, as well as on biomass raw materials such as pellets and firewood, the energy production tax, currently at 7%, is temporarily eliminated and reduced from 5.5% to a special rate of 0.5%. Maximum retail prices for butane and propane are also frozen. The VAT on gasoline and diesel is also reduced, which, according to the Prime Minister's office, will result in a savings of approximately 30 cents per liter when filling up. Consumer organizations estimate that the reduction will be around 17 cents for diesel, which has seen the largest price increase. A key point, also included in the decree, is granting the National Commission for Markets and Competition (CNMC) new supervisory and sanctioning powers to prevent operators from exploiting the tax cut to increase their profit margins and enrich themselves. This is essential to prevent the tax reduction from benefiting certain companies more than citizens and, therefore, taxpayers.

Visibly pleased with the regional financing proposal presented by Spanish Vice President María Jesús Montero, but aware that it's impossible to obtain 100% of what they want, the Catalan Minister of Economy, Alícia Romero (Caldes d'Estrac, 1976), received ARA at the Palau de la Generalitat, convinced that Catalonia will succeed. She also stated that she doesn't see it as impossible for the proposal to go ahead.

There is one driving force preventing the Spanish government's ability to manage from grinding to a halt: tax revenue. Through November, tax collections have exceeded €300 billion for the first time. This unprecedented level, achieved just one month before the end of the fiscal year, suggests that 2025 will be another record-breaking year for revenue.

Last week we read that Inflation returned to 2.9% due to rising energy prices. Without a doubt, the price of electricity and fuel are the main factors driving up prices in the domestic economy, as they not only affect family pockets but also the costs - and therefore the prices - of companies. But have you ever stopped to think about what we pay for on our electricity bill?

European Union finance ministers today agreed on a reform of value-added tax (VAT) rules that will give governments more flexibility to apply reduced tax, exclude environmentally harmful products and allow other products considered essential to be added. The reform has needed three years of "marathon" negotiations, in EU Commissioner for the Economy Paolo Gentiloni's words, who recalled that proposal was initially made in 2018 and negotiations have dragged on until today.

The Spanish government says it has given autonomous regions economic oxygen after the Fiscal and Financial Policy Council (FFPC) met on Wednesday. The Ministry of Finance has informed regions they will receive €112.2bn in advance funding for 2022, a 6.3% increase on the previous year. Of this amount, ARA has learnt, Catalonia will receive €21bn, an 6.8% increase on 2021.

Sixteen months and a pandemic later, the new rules of the game are about to be activated. From Thursday, 1st July, e-commerce businesses selling to other EU countries will be taxed according to new criteria. Brussels is thus approaching a twofold objective: to become a real single market and to shield itself against fraud and competition problems generated by large foreign platforms. But what does this change mean, in practice, for small entrepreneurs?