The technicians of the Ministry of Finance (GESTHA) demand from the Government that both pensioners and unemployed people who are earning less than 18,004 euros per year do not have to pay the Personal Income Tax (IRPF). They point out that, if we want to prevent workers who are receiving the Minimum Interprofessional Wage (SMI) in 2027 are taxed on this income, this measure should be transferred to those people who collect an unemployment benefit from the SEPE (State Public Employment Service) or a Social Security pension.
This proposal comes after it was known that the Ministry of Labor and Social Economy is proposing that the SMI rise next year up to 1,286 euros per month in 14 payments, which is equivalent to 18,004 euros per year. To prevent the increase from resulting in an increase in the taxes that these basic salaries are charging, technicians have calculated that the Government will have to modify the deduction for work income in personal income tax.
The Treasury technicians have considered that the deduction would have to rise from the current 590.89 euros to 1,033.66 euros in 2027 and in this way, a single person, who does not have family or personal responsibilities who collects this SMI, will not pay personal income tax.
Pensioners and those who do not have a job must have the same tax treatment
For this organization, it is not acceptable that the minimum wage of workers be free of personal income tax and that pensioners and unemployed people who are receiving similar payrolls are left out of this measure. Both pensions and unemployment benefits are considered income from work for tax purposes, which is why they defend that these groups can benefit from the same deduction when their income does not exceed the new SMI.
Applying this measure will cost the public coffers little, because pensioners can count on higher personal minimums for reasons of disability or age, and many unemployed people do not manage to add that money in income. That is why they demand that there be a political consensus that allows the lowest incomes to be free of taxation as the SMI is updated.
They remember, focusing on this aspect, that personal income tax has not updated certain minimums and reductions for years, which is why it is important that all these elements be reviewed so that salary increases do not increase the tax burden.
The personal income tax deduction could cost 1.1 billion
The total cost of this deduction would be around 1,100 million euros, 700 million more than in 2026. Technicians consider that the mechanism will serve to protect workers with less income without directly increasing the salary costs of companies.
The Treasury can seize the retirement pension above 1,221 euros per month, but it will not be able to keep the money that the retiree saves from the protected part, even if it has been in the bank for months.
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Maintaining the SMI without taxation could help bring closer positions between the Ministry of Labor and business organizations because it would prevent tax improvements from having to be translated into new salary increases.