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Millions of people across the Valencian Community, including thousands living in Alicante province, could soon see their income tax bills reduced under new plans announced by the regional government.

 

The proposal forms part of the Valencian government's 2026 budget package and would reduce the regional portion of income tax for around 2.7 million taxpayers.

 

According to Regional Finance Minister José Antonio Rovira, the main aim is to provide relief for middle-income earners, a group he described as "the great forgotten ones."

 

The biggest impact is expected to be felt by people earning between €32,000 and €72,000 a year. The regional government estimates that around €100 million of the total €160 million tax reduction will go to taxpayers within this income bracket.

 

"This measure is aimed primarily at middle-income earners," Mr Rovira said, arguing that previous tax rates in these bands had been relatively high.

 

The planned changes would not come into force immediately. Instead, they would apply to income earned during 2026 and would be reflected when residents submit their tax returns in 2027.

 

The government says all taxpayers would benefit to some extent because the reductions would apply across several income bands, although middle-income households are expected to see the greatest gains.

 

Mr Rovira insisted the tax cuts would not come at the expense of public services, pointing out that the 2026 regional budget is the largest in the Valencian Community's history.

 

"Eight out of every ten euros" in the budget will still be directed towards social spending, including healthcare, education and housing, he said.

 

The proposed legislation also includes measures designed to make it easier for family businesses to be passed on to the next generation through changes to inheritance and gift tax rules.

 

More than 90% of businesses in the Valencian Community are family-owned, and the minister said the government wanted to help ensure they can continue operating in the future.

 

The plans are currently going through the consultation and approval process. While the government hopes to have the budget approved this summer, officials say the tax measures could also be adopted later in the year without affecting their planned introduction in 2027.

 

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