Balearic Government tax revenues soar

The budget estimate was 4,215 million but the government actually collected 4,713 million euros, which is a whopping 498 million extra.

The government also managed to save 337 million euros, despite the fact that spending soared as a result of the pandemic.

The surplus will be used to pay off debts owed to the banks and the central government, but PP has echoed demands by other politicians for a reduction in personal income tax; the abolition of tax on donations and inheritances and a reduction in property transfer tax.

No tax cuts

But those demands clearly fell on deaf ears. The Ministry of Finance claims that the only reason there’s an excess of 500 million euros is because the forecasts were prudent, given the economic uncertainty due to the pandemic and it insists that the taxes are being used to pay for social policies that were implemented during Covid.

The Ministry also points out that 2021 had the highest public spending in the history of the Community, with more than 5.5 billion euros spent on public policy, up 930 million from the year before and an increase of 60% compared to 2015.

In the two years blighted by the pandemic, spending amounted to about 10.2 billion euros.

When asked about the surplus and how the Government managed to save 337 million euros at such a difficult time, the Ministry claimed that most autonomous communities ended up with a positive balance.

The surplus

The Conselleria d'Hisenda says the fact that income has been greater than calculated is down to tax collection and central Government transfers and stressed that 330 million euros in Covid funds arrived instead of 295 million.

The Government insists that the money has been used to improve social services and health; that more educational personnel have been hired and aid given to entrepreneurs on the Islands.