Spanish tax revenues will increase by €5.6 billion in 2020 as the country moves to introduce a digital services and financial transactions tax, the government announced.

The newly re-elected Socialist government submitted its new four-year stability programme to the European Commission, which envisages a wide range of new taxation measures. The net effect on revenue is expected to be €1.7 billion from corporate tax exemptions, €1,2 billion from a levy on digital services and €850 million from a levy on the financial transactions.

In parallel, the Spanish government will lower taxes for small and medium businesses.

For this year, the Spanish government projects 2.2% growth for 2019 and 2% budget deficit. The deficit is projected to drop to 1.1% in 2020.

Overall, the Spanish government’s forecast is a downward revision of growth. The previous four-year stabilisation programme projected 2.4% growth for 2019 and 2.3% for 2020.

Spain remains on track to see unemployment below 10% by 2022. In 2018, Spain’s unemployment stood at 15.3%, second only to Greece in the Eurozone.