Spain's 1997 State Budget: spending, pay, pensions and taxes

Automatic summary, not yet reviewed

1. The 1997 State Budgets are approved, with spending credits of 30,464,303,469 thousand pesetas for the State, autonomous agencies, Social Security and other public entities, funded by expected revenues and net borrowing.
2. During 1997 the pay of all public employees and senior officials is frozen and cannot rise from 1996 levels. Public job openings are also restricted: new positions must be below 25 percent of the staff replacement rate.
3. Public pensions under the State passive classes scheme and contributory Social Security rise by 2.6 percent from the amounts received on December 31, 1996. Minimum amounts and top-up payments are also set.
4. Spending is capped: the carryover of unused budget credits is suspended in 1997 with a few exceptions, initially approved credit limits cannot be exceeded, and transfers from capital to current spending are restricted.
5. The State may increase public debt up to a cap: outstanding debt on December 31, 1997 may not exceed the January 1, 1997 balance by more than 2,856,704,325 thousand pesetas. State guarantees may not exceed 525,000 million pesetas.
6. For personal income taxincome tax The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings. (IRPF), the filing thresholds for 1997 are raised (1,200,000 pesetas for employment income, 1,250,000 for joint filing and pensions) and the 5 percent withholding on property sales by non-residents is changed. If new tax rates are not passed, the 1995 rates apply, adjusted down for inflation by 2.6 percent.
7. Cadastral values for the property tax are updated with a 2.6 percent coefficient, business activity tax rates are amended, and beer and intermediate products excise taxes rise by 2.6 percent; s/p 98 gasoline goes up 5 pesetas per liter. Fixed-amount State fees rise by a 1.08 coefficient.
8. The law sets the shares of municipalities and provinces in State taxes and regulates the new funding system for the Autonomous Communities for 1997-2001, with an earlier advance-payment system for those that do not adopt it.

Who it affects

• Public employees and senior officials: Their pay is frozen in 1997 at 1996 levels.
• Pensioners: Their pensions rise 2.6 percent, with minimum amounts and top-ups set.
• Personal income tax (IRPF) taxpayers: Filing thresholds change, as does withholding on property sales by non-residents.
• Municipalities, provincial councils and Autonomous Communities: Their shares of State taxes and 1997 funding rules are set.
• Businesses and self-employed workers: Social Security contributions, corporate tax coefficients and some tax and fee rates change.

Words worth knowing

Crédito presupuestario

Budget credit: the maximum amount of money an administration may spend on a specific purpose under the budget.

Tasa de reposición de efectivos

Replacement rate: a rule limiting new public jobs to a percentage of positions that become vacant.

Valor catastral

Cadastral value: the value assigned to a property by the Cadastre, used to calculate the property tax.

Deflactar

To adjust amounts to offset the effect of inflation.

Entrega a cuenta

Advance payment: a provisional payment the State makes to a regional or local government before the final settlement.

income tax

The personal income tax (IRPF in Spain): what people pay on what they earn from work, business or savings.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries