Spain's 2008 State Budget: spending, pay, pensions and taxes

Automatic summary, not yet reviewed

1. The budgets of the State and its bodies for 2008 are approved, with spending credits of 314,322,266.91 thousand euros, funded by estimated revenues of 308,558,998.84 thousand euros and by borrowing.
2. Pay for public sector staff rises by a maximum of 2% compared to 2007. In addition, an extra 1% of the wage bill goes to supplements, with the goal of paying them in 14 installments a year.
3. Public sector hiring is capped at 100% of the replacement rate, with exceptions such as the State security forces, the justice administration, teachers, dependency care, local police and firefighters.
4. Public pensions are uprated by 2% in 2008, with a maximum of 2,336.41 euros per month (32,709.74 euros per year) and minimum amounts set for each type of pension.
5. Non-contributory Social Security pensions are set at 4,505.34 euros a year, and a new 357-euro annual supplement is created for pensioners who live in a rented home and do not own one.
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., the tax brackets, the personal and family minimums, and the deductions for work income and self-employed income are all updated by 2%, so inflation does not raise the tax burden.
7. Cadastral values of real estate and the fixed amounts of State fees are updated by 2%; airport fees rise by 3%, except the security fee, which rises by 10%.
8. Social Security contribution bases and rates are set for 2008: the maximum contribution base is 3,074.10 euros per month and the general rate for common contingencies is 28.30%.

Who it affects

• Public employees and public sector workers: Their pay rises by at most 2%, and new public hiring is limited to the replacement rate.
• Pensioners: Their pensions rise by 2%, with maximum income limits and updated minimum amounts.
• Income tax payers: Tax brackets and minimums are adjusted by 2% to offset inflation.
• Workers and companies: Social Security, unemployment and training contribution bases and rates change.
• Municipalities and Autonomous Communities: Their funding through a share of State taxes and compensation funds is regulated.

Words worth knowing

Tasa de reposición de efectivos (replacement rate)

A rule that caps new public sector jobs at the number of workers who retire or leave.

Deflactar (bracket adjustment)

Updating tax figures so that rising prices do not make people pay more tax for the same purchasing power.

Pensión no contributiva (non-contributory pension)

A pension for people with few resources who have not contributed enough for a regular pension.

Valor catastral (cadastral value)

The value the administration assigns to a property for tax purposes, used to compute taxes such as the IBI.

Complemento de destino (destination supplement)

The part of a civil servant's pay that depends on the level of the job they hold.

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