Finance minister Catalina Cladera outlining tax policy for 2019.

10-07-2018

Balearics finance minister Catalina Cladera does not anticipate making any adjustments in taxation when the government draws up what will be its final budget before the elections in May next year.

For the 2019 budget, therefore, the tourist tax rates will remain as they are at present, while the higher rate of income tax for top earners will be maintained. This was introduced after PSOE and its partners came into power in 2015. Although a state tax, regional administrations do have some flexibility to make adjustments to income tax rates.

Cladera is therefore ruling out the introduction of two new taxes that have been proposed by Més. These are on hire cars and the most polluting businesses. Moreover, there will not be any lowering of capital transfer tax (essentially stamp duty) for property sales at the bottom end of the market.

In outlining the general principles for the 2019 budget, Cladera explained that the Balearic government is following similar lines to other regional administrations in including financial assistance for accommodation rental in the budget.

On an issue not specific to the Balearics, Cladera commented on a proposal that has come from the national employment ministry. A special tax on banks to assist with sustaining the pensions system is a proposal that should be considered.

With regard to the special economic regime for the Balearics, Cladera noted that it will be difficult for this to be implemented from 1 January, which is what had been hoped. The change of government in Madrid interrupted negotiations which are now continuing.