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Spanish government plans to tax the rich and up coronavirus aid

The Spanish government on Tuesday presented its budget plan for 2021, foreseeing higher taxes for the wealthy and more funds for social spending in the context of the coronavirus crisis.

The Spanish government on Tuesday presented its budget plan for 2021, foreseeing higher taxes for the wealthy and more funds for social spending in the context of the coronavirus crisis.

Prime Minister Pedro Sanchez and his leading coalition partner, deputy prime minister Pablo Iglesias, announced the government would increase taxes for large companies and people earning more than 200,000 euros (236,620 dollars) per year, as well as assets over 10 million euros.

State aid to small- and medium-size enterprises as well as the tourism industry is to increase by 150 per cent. Spending for the health sector would also increase by 150 per cent.

Sanchez said the aim of the measures was to dampen the effects of the coronavirus crisis, modernize the economy and strengthen the welfare state. Iglesias said it marked an end to austerity.

The budget foresees limiting spending to 196.1 billion euros – excluding no-interest payments and social spending – and comprises 27 billion euros of aid from the European Union.

Spain’s budget deficit this year will amount to 14.1 per cent gross domestic product, according to the International Monetary Fund (IMF).

The budget plan of Sanchez’ minority coalition government still has to be approved by parliament.

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