The Community of Madrid was again the most fiscally competitive region in 2023 for the fifth consecutive year, followed by the Basque Country, in a ranking that closes Catalonia and in which the autonomy that improves the most is the Extremadura, which advances eight places.
These are some of the data collected in the eighth annual Standalone Tax Competitiveness Index (TACI) prepared annually by the American Tax Foundation and the Foundation for the Advancement of Freedom.
For eight years, the IACF, prepared by the economist Cristina Enache, has measured and classified the level of tax competitiveness of the nineteen Spanish territories with fiscal autonomy (all the autonomous communities but with the three Basque provinces separately).
Details of this year’s IACF will be presented at an event this Monday at the Senate, as part of the “Economy and Tax Competitiveness” conference, which will bring together four regional Ministers of Economy and Finance on this occasion: Madrid, Andalusia, Extremadura and La Rioja, as well as international experts in tax competitiveness.
As usual, during the event a plaque will be given to the autonomous community that tops this year’s ranking: Madrid, with 7.24 points out of ten, which is at the top of the absolute ranking of the IACF for the fifth consecutive year.
Madrid is followed by the Basque provinces of Vizcaya, Alava and Gipuzkoa (in that order), and Andalusia occupies the fifth position (third community) with 6.44 points. This year, Extremadura experienced strong progress, going from fifteenth to seventh place in a single year. Rioja is also two positions ahead of 2023, placing it in eighth place.
Closes the 2023 ranking, in 19th place, Catalonia with 4.52 points. The score of Asturias and Aragon, at the bottom of the table, is slightly better. In the case of Catalonia, one of the factors that prevent it from achieving greater fiscal competitiveness is the persistence of numerous additional taxes created by this regional government, according to the report.
Taking into account these data, the Foundation for the Advancement of Liberty promotes greater tax competition between autonomous communities and highlights that “in other countries with a federal or semi-federal structure, the competition of differentiated tax systems is very positive for general development and contributes to maintaining reduced tax burden borne by citizens and businesses.
The Secretary General of the Foundation, Juan Pina, declared that “the current regional reality requires higher levels of fiscal autonomy so that it is the regional assemblies that decide with sufficient margin on the taxes applied in their territories, thus moving towards fiscal federalism in a competitive framework favoring economic freedom”.
For his part, the president of the American Tax Foundation, Daniel Bunn, will travel to Madrid to participate this Monday in the presentation of this year’s report to the Senate, in the Clara Campoamor room.
