The Second Vice President and Minister of Labor, Yolanda Díaz, closed on Thursday the conference “Tax reform on hold”, organized by her party, Sumar, and assured “that we are very far from the other part of the government of coalition, the PSOE. “, because “he does not want a global tax reform”.
Díaz assures that Spain needs to increase public revenues, but that “it is not a question of lowering or increasing taxes, but of knowing who pays them.” The vice-president recalled that Spain has a tax contribution gap (the weight of taxes and contributions in relation to GDP) of almost five points compared to the EU.
This tax contribution remained slightly lower at 37% in 2023 in Spain, which leaves space of “80 billion dollars to address the tax reform that our country has been waiting for since the transition”, according to the Minister of Labor.
This Tuesday, in the Budgetary and Structural Plan which requires the new EU budgetary rules for each EU country, the government committed to the European Commission to carry out “additional” tax reform for reduce the deficit (the imbalance between public revenues and expenditure)”. Although the document provides almost no details.
In the same vein as the “complementary tax reform”, this document includes the objective of “promoting the convergence” of our country’s tax perception towards the EU average.
However, Yolanda Díaz stressed on Thursday that “we know that the PSOE does not want reform following the white paper” on the reform of the collection system that it carried out a few years ago on behalf of the previous coalition government, and that remained almost entirely in a drawer.
Currently, the Government is negotiating the General State Budgets (PGE) for 2025. During the press conference which followed the Council of Ministers on Tuesday, the head of the Economy portfolio, Carlos Body, confirmed the transformation of temporary taxes into permanent taxes. levies on banks and energy companies are part of this “tax reform” which is reflected in the document sent to Brussels.
Of course, for now, the government has not even been able to approve the deficit trajectory of the 2025 PGE, after Junts lifted the inauguration blockade in the Lower House in July. A parliamentary setback which did not prevent the preparation of the Budgetary and Structural Plan sent to the European Commission, but which endangers the budgets, after those for 2023 have already been extended this year.
The document that the European Commission will evaluate over the next six weeks does not detail anything else on additional “tax reform”, although the President of the Government, Pedro Sánchez, announced in his speech at the start of the school year (at beginning of September) his intention to increase taxes on the richest.
Most experts believe that tax reform is essential. Above all, as a necessary preliminary step if we also intend to address a reform of regional financing, as shown by the agreement between the PSC and the ERC on the “singularity of Catalonia” which allowed Salvador Illa to be invested as President of Parliament. Generalitat, and that it could be extended to the entire State.
On the other hand, the opportunity seems inalienable to “improve the sufficiency of the tax system and respect the commitments of the European Union (EU). [de reducción de los desequilibrios presupuestarios y la deuda pública] without losing the train of progress, in the midst of a green and digital transition, which requires investments,” says Carlos Martín Urriza, spokesperson for Economy and Finance of the Sumar parliamentary group in the Congress of Deputies.
The Tax and Structural Plan takes into account, as a measure already taken, the minimum rate of 15% for multinationals, which is the transposition of a European directive and which is currently being developed in Congress. From the Ministry of Finance, they defend that the coalition governments have already made other important changes “on the principle that whoever has the most must contribute”. As they list it: “The solidarity tax for the wealthy and the increase in income tax for the highest incomes, such as those above 300,000 euros. Added to this are other measures such as the creation of a tax on certain digital services or even a tax on financial transactions.”
