The Organization for Economic Cooperation and Development (OECD) has recommended to Spain that it reduce social contributions to Social Security for companies for permanent workers with low salaries and that efforts continue to reduce excessive temporality. It also advocates reducing tax exemptions, for example in reduced VAT, and increasing taxes on polluting fuels. This is highlighted by the international organization in the document 'Reforms in economic policy: towards growth', and in which it sets out its recommendations for each country. In the case of Spain, the OECD considers that there are still improvements to be made, such as Increase productivity by varying the tax burden towards "less distorting" taxes, increase labor mobility or expand vocational training, in order to reduce inequalities and promote more inclusive growth.
Considers that our country has to ensure that the costs and contributions to Social Security for companies of fixed and temporary employees are comparable, and that means fighting against those who resort to the second ones in an abusive way, with no other justification than saving money . It also recognizes that last year a new legal framework for labor inspectors was created, but notes that there is a high rate of temporary employment that increases the precariousness of the workers affected, which limits labor mobility and is a factor that increases poverty. In fact, income inequalities have progressed in Spain since the outbreak of the crisis in 2007, and remain above the OECD average. This is partly due to the high unemployment rate – Spain has the second highest of its 36 member countries, second only to Greece – and also to the decrease in the resources of families that are at the bottom of the social scale.
It values the measures that were introduced to fight against abusive temporality last year, but considers that it should continue to act and calls for greater convergence in the cost of dismissing fixed and temporary workers.
The organization goes further, stressing the need to lower the cost of dismissal, to revitalize the labor market and reduce the existing duality by pursuing a greater convergence between the costs of temporary and indefinite dismissals, as well as persevere in the fight against the abuse of temporary contracting. The OECD especially questions the existence of exemptions and deductions in income tax and VAT that seem unjustified. And it is committed to suppressing the reduced VAT rates, which are regressive, and to broaden the tax base of income tax. In fiscal matters, it recommends Spain reduce exemptions, increase the burden for polluting fuels and reduce the social contributions of the It also proposes to Spain that it eliminate the regulatory barriers that depend on the size of companies and the barriers to operate between regions, which limit the growth of companies and their productivity. Likewise, it asks to continue implementing the Law of Market Unity, increase transparency and cooperation among the different administrations.
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