Almost all autonomous communities under the common regime are slowing down the tax cuts they approved in previous years. The years when the prevailing trend was to approve reductions in transferred taxes, such as in the IRPF, inheritance and donations, or wealth tax, are coming to an end. The current trend is quite the opposite, warns the Independent Authority for Fiscal Responsibility (Airef) in its latest report. The only exception is Madrid, which continues to increase its tax reductions.
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At a time when public services need more resources, almost all autonomous communities are increasing revenue by eliminating tax reductions. The fiscal supervisor assures that the trend is “slight” for now, but common in almost all territories, except the central one.
The figures provided by Airef are as follows: in the period 2026-2030, the permanent fiscal measures adopted by the autonomous communities will result in a revenue loss of about 1,150 million, compared to the 1,409 million forgone in the previous period.
The tax that continues to concentrate the largest cuts in 2026 is the IRPF, in its regional bracket, which, however, has increased its revenue in almost all territories. Thus, until 2030, 1,030 million in income from the income tax will be lost, compared to the 1,800 million lost in the previous period. Madrid is the only place that has expanded reductions in the IRPF and forgoes 512 million, half of the national total.
The reform of regional financing seeks to discourage “fiscal dumping”
After the IRPF, the second place is occupied by cuts in the inheritance and donations tax, although these are concentrated in a few autonomous communities. In Madrid, 130 million more is forgone by subsidizing this tax figure in 2026, and in the Valencian Community, 61 million is forgone.
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The trend of almost all autonomous communities to increase tax revenue mainly falls on the approval of environmental taxes, highlights Airef, without specifying figures.
The map of regional taxation prepared by the independent supervisor ultimately shows very different fiscal decisions among communities. For the same taxable event, a citizen pays more or less depending on where they live. Thus, Catalonia, which remains for another year the territory with the highest tax pressure in the State, and Castilla-La Mancha maintain a positive overall impact of the measures adopted. That is, the tax cuts they approve are offset by new taxes, so the revenue balance is not negative. There is a second group of governments that have reduced revenue losses. This is the case of Andalusia, which held elections this month, or the Balearic Islands. The places where the greatest revenue renunciation occurs are Madrid, Valencian Community, Navarre (where 0.4% of GDP is forgone), Asturias, and La Rioja. In Murcia and the Canary Islands, the revenue reduction is 0.1% of GDP, and in the rest of the autonomous communities, it does not reach a tenth of GDP.
The Fiscal Authority does not reflect in this year’s report the consequences of several autonomous communities, essentially Madrid, for eliminating deductions in the wealth tax due to the approval of the solidarity tax on large fortunes. Last year, however, the supervisor did point out that Madrid had collected 555 million by recovering wealth tax quotas with the aim that the revenue does not end up in the Tax Agency.
The trend is to increase tax revenue with environmental taxes
Regional tax cuts have caused harsh clashes between Catalonia and Madrid. The president of the Generalitat, Salvador Illa, called the tax decisions of Isabel Díaz Ayuso’s government and her predecessors “fiscal dumping.” The reform of regional financing put on the table by the former Minister of Finance, María Jesús Montero, proposed discouraging these tax cuts, mainly from the central territory.
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