SPAIN will pay back up to 15% of income tax to people who buy an electric vehicle before the end of the year in a bid to encourage sustainable driving.

The maximum income tax deduction would be €20,000.

Prime Minister Pedro Sanchez had hinted at the new measure in an interview on Monday with Cadena SER and said the policy had already been included in an addendum submitted to the European Commission.

“The aim is to consolidate the investments underway in our country for the modernisation of the auto industry and place Spain at the forefront of Europe’s rollout of electric vehicles,“ Economy Minister Nadia Calviño said on Tuesday.

The initiative is part of an anti-inflation package worth €8.9 billion in which other measures already in place – such as public transport subsidies and IVA tax cuts to basic foods – will be extended until December 31.

The package had been due to expire on Friday.

Calviño said that total state support – including tax cuts, subsidies and grants – since Russia’s invasion of Ukraine in February 2022 amounted to €47 billion.

“Spain is coping much better than the rest of Europe with the complex international scenario, but the war and the consequent rise in interest rates continues to have its effects … which is why (the package) will allow us to move calmly and confidently through the second half of the year in a context of uncertainty but with the hope that this war will end as soon as possible,” Calviño said.

The announcements come as the Sanchez government faces a general election on July 23 with most opinion polls suggesting that the conservative Partido Popular are likely to become the largest single party and could form a government in alliance with the far-right Vox party.


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