Tax revenue up by more than 10% in 2025, public deficit down to 2.2%
In 2025, the Spanish State collected €142.4 billio through Personal Income Tax (IRPF), a 10% increase compared to the previous year. This was largely due to the Government’s refusal to index tax brackets (deflate the rates) to mitigate the increase in tax pressure caused by inflation. This is known as “fiscal drag” (or “cold progression”): salaries rise in line with inflation, but because tax brackets remain unchanged, more is collected…
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