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ARCHIVED - Budget 2022 in Spain: record amount allocated to regional spending
With salary increases and tax breaks, the government in Spain hopes to kick-start economic recovery after Covid
On Thursday October 7 the Council of Ministers approved the new 2022 budget for Spain which has a record spending ceiling, a significant increase in regional financing as well as a 2% increase in many official salaries and rent breaks for younger people. The spending limit approved for 2022 is 196,142 million euros and includes money from the EU bailout fund to bring the total to slightly more than 2021’s budget of 196,097 euros.
With these resources, the Spanish government intends to push forward the post-Covid economic recovery with an overall growth of 7% and a 2.7% increase in employment. The latter will see the unemployment rate dropping to 14.1% in line with official projections made last month.
The debate on possible tax increases has been one of the stumbling blocks in the budget negotiation and corporation tax has proven to be a particular sticking point. It has at last been agreed that a minimum corporate tax rate of 15% will be applied for 2022.
The budget for next year will see salaries for public employees increase by 2% while minimum and non-contributory pensions will all be re-evaluated according to the average inflation experienced in Spain between December 2020 and November 2021.
The much-anticipated youth housing voucher will also be included, which will give young people aged between 18 and 35 on lower incomes 250 euros per month for two years towards their rent. A cultural voucher of 400 euros will also be offered to people once they turn 18 for purchasing books or engaging in artistic activities.
Crucially, the budget will include a record endowment for regional financing, with each autonomous community in receipt of 112,213 million euros, 6.3% more than in 2021 and a record figure in Spain.
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