Spanish Treasury Prepares Tax Deduction for Minimum Wage Workers Amid Policy Dispute
The proposed fiscal measure aims to assist those earning the current minimum wage without extending benefits to future salary increases.
The Spanish Ministry of Finance is in the process of establishing a specific tax deduction for workers earning the annual minimum wage (Salario Mínimo Interprofesional, SMI), following recent wage increases.
However, this deduction will be limited to annual earnings of €16,576, meaning it will not apply to any future increases in minimum wage levels.
This matter has emerged as a point of contention between the Ministry of Finance, led by María Jesús Montero, and the Ministry of Labor, headed by Yolanda Díaz.
Reports indicate that the Ministry of Labor is opposed to the restriction that prevents the deduction from extending to future increases, while the Ministry of Finance remains steadfast on this point.
During a recent press conference, Montero elaborated that the proposed tax deduction aims to benefit those who, despite receiving the current minimum wage, do not qualify for other tax reliefs and are still required to pay personal income tax (IRPF).
Currently, approximately 20% of minimum wage earners are unable to access existing deductions and must pay the applicable IRPF.
The fiscal measure being prepared by the Treasury is expected to cost around €120 million.
However, it will only be applicable to the 2025 minimum wage figure of €16,576, equating to approximately €1,184 per month distributed over 14 payments.
As such, any future increases in the minimum wage, which the government intends to pursue, will not be covered by this new deduction should it be implemented.
Montero has articulated that it is reasonable for salaries to contribute proportionally to the funding of public finances as wages increase.
As negotiations continue, the deadline for reaching an agreement is set for this Friday, which will be the final chance for the Treasury to veto the proposed legislation supported by the Popular Party (PP) that seeks to raise the minimum income exempt from IRPF.
However, this deduction will be limited to annual earnings of €16,576, meaning it will not apply to any future increases in minimum wage levels.
This matter has emerged as a point of contention between the Ministry of Finance, led by María Jesús Montero, and the Ministry of Labor, headed by Yolanda Díaz.
Reports indicate that the Ministry of Labor is opposed to the restriction that prevents the deduction from extending to future increases, while the Ministry of Finance remains steadfast on this point.
During a recent press conference, Montero elaborated that the proposed tax deduction aims to benefit those who, despite receiving the current minimum wage, do not qualify for other tax reliefs and are still required to pay personal income tax (IRPF).
Currently, approximately 20% of minimum wage earners are unable to access existing deductions and must pay the applicable IRPF.
The fiscal measure being prepared by the Treasury is expected to cost around €120 million.
However, it will only be applicable to the 2025 minimum wage figure of €16,576, equating to approximately €1,184 per month distributed over 14 payments.
As such, any future increases in the minimum wage, which the government intends to pursue, will not be covered by this new deduction should it be implemented.
Montero has articulated that it is reasonable for salaries to contribute proportionally to the funding of public finances as wages increase.
As negotiations continue, the deadline for reaching an agreement is set for this Friday, which will be the final chance for the Treasury to veto the proposed legislation supported by the Popular Party (PP) that seeks to raise the minimum income exempt from IRPF.
Translation:
Translated by AI
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
