The Union of Andorra (USdA) proposes raise the personal income tax thresholds (IRPF) for prevent salary increases intended to compensate for inflation entail a higher tax burden for workers, according to defense in a statement. The union claims update the exempt personal minimums and the maximum tax allowancewhich have not been systematically revised in accordance with the evolution of the cost of living.
The proposal provides raise the first threshold from 24,000 to 30,599.41 euros, the second from 30,000 to 38,249.26 euros and the third from 40,000 to 50,999.01 euros. The demand for reform establishes that the maximum income tax bonus would go from 800 to 1,019.98 euros. These amounts would be applied from the year 2027, taking as a reference the evolution of the IPC between 2016 and 2025, the release states.
The USdA proposes to establish, from 2028, a annual automatic update mechanism linked to the CPI official of Andorra. If inflation were negative, the amounts would remain without reductions.
The union argues that wage increases aimed at maintaining purchasing power should not lead to one tax penalty. And he argues that keeping the income tax thresholds frozen causes a progressive loss of their real value and it can increase the tax pressure on labor income, he explains in the press release.
The USdA urges policy makers to study and incorporate this proposal to adapt taxation to the evolution of the cost of living and prevent inflation from resulting in an indirect increase in taxes.
