In a significant move for workers who receive the interprofessional minimum wage (SMI) in Spain, the Tax Technicians from the Ministry of Finance (Gestha) have issued a call for the recent IRPF exemption, reached in an agreement between the Ministries of Finance and Labour, to become a permanent measure. This proposal arises from the agreement reached last Friday, which establishes that workers who earn the minimum wage will not be obliged to pay income tax under the IRPF for the year 2025.
This measure seeks to accompany the growth projection of the minimum wages as recommended by the Advisory Commission for the SMI, according to the statement issued by Gestha. The agreement, reached in a rushed negotiation, introduces a deduction in the IRPF liability so that employees with earnings equal to or below the minimum wage are exempt from paying tax.
Gestha has urged the parliamentary groups of the governing coalition, PSOE and Sumar, to include this measure as an amendment in any bill that is already in the parliamentary process. Additionally, they have requested a modification to the income tax regulation so that the new deduction is taken into account in the calculation of withholdings, allowing those workers not to have withholdings for the rest of the year.
Additionally, it has been stressed that this deduction should be extended to dependent self-employed workers, equalizing the reductions they already enjoy in accordance with Article 32 of the Income Tax Law. Nevertheless, details are still missing on how this agreement will be implemented, but Gestha warns that it is crucial that the deduction does not cause a mismatch in the tax brackets. This will prevent those who earn slightly more than the minimum wage from ending up in an inequitable situation by receiving a lower net take-home pay.
Gestha argues that, although there is no inflation indexing in the IRPF after years of inflation, the deduction is an effective tool to ease the burden on those earning middle- or low incomes. Regarding the economic impact, Gestha calculates that the exemption would have a fiscal cost of around 162 million euros, a figure lower than the "just over 200 million" estimated by the First Vice President and Minister of Finance, María Jesús Montero.
Finally, it has been clarified that this measure will not affect workers whose annual income is below €15,874, as they are already exempt from taxation under the current threshold. This decision represents a step forward in the economic protection of workers who earn lower wages in Spain.
Fuente: Gestha
