Income tax reforms led to big savings in the Balearics

People in the Balearics saved 208.68 million euros in 1999 and 2000 thanks to the reforms to the IRPF (income tax), it was revealed yesterday. Salvador Ruiz Gallud, the director general of the tax office, said that taxes had dropped by an average of just under 14 per cent compared to the amount collected in the Balearics under the old tax system. Taxes paid in the Balearics in 1999 were 95.18 million euros less than the previous year, and in 2000 went down by a further 113.5 million. Ruiz Gallud said that the reforms had been balanced, and the biggest reductions had been felt by workers, and pensioners. The director general said that the deductions from penisons had been reduced by 33.15 million euros. Ruiz Gallud underlined the effect this had had on the local economy. “Lower taxes generate greater consumption, and therefore an increase in demand, which is translated into growth for the Balearic Gross Domestic Product.” He also claimed that since the fiscal reforms came into force, 52'600 new jobs had been created in the Balearics and eight per cent of them (4'260) could be attributed to the effect of the tax reductions. Another beneficial effect is an increase in long-term savings through pension plans, which grew by 9.5 per cent last year.