Spain must improve the efficiency and progressivity of its tax system and adopt measures to reduce the duality of its labor market, it must also tax fuel more to better reflect its environmental impact, fight against hiring abuse and turn to the long-term unemployed duration (those who have been unemployed for more than a year). These are some of the duties that the OECD puts our country in its latest report «Bet for growth 2019», made public yesterday.
The international body claims Spain that improves the efficiency of your tax system. Among its recommendations is an increase in fuel taxes in order to better reflect the environmental cost of polluting emissions. A new way of income that also justifies the fact that our country is among the group that least collect green taxes.
The OECD concludes that taxation in Spain is very focused on taxes on labor, that is to say on the IRPF and the Social Security contributions, and is of the opinion that the exemptions and deductions that still exist are undermining the collection capacity. The club of the rich countries bets for Spain to reduce the exemptions and deductions that still exist in the IRPF and also advises that the reduced VAT rates in products that are "regressive" be suppressed. In exchange for these tax increases, he urges Spain to cut Social Security contributions for workers with low salaries who are hired indefinitely.
In his report, the body that runs Angel Gurría says that Spain is still far behind in GDP per capita compared to the richest OECD countries due to lower productivity and higher unemployment. And he complains that income inequality has increased since 2007 and continues above the OECD average, "partly due to high unemployment and falling income in low-income households." According to their data, the poorest 20% earn only 6% of the total income, far from the 9% obtained in the best countries.
The reforms carried out in Spain in the period 2017-2018 have been «limited», Emphasizes the organism. Although measures have continued to be approved to try to reincorporate the unemployed into the labor market, the implementation of these initiatives "is delayed". And although "more should be done in this area, especially to help the long-term unemployed", the OECD sets a new priority for Spain: we must improve innovation in the economy. With what objective? "It is justified by the weak growth in productivity and the substantial decline in innovation spending," he says.
"Productivity can be improved by shifting taxes to those figures that lower activity, increase competition, strengthen educational outcomes and improve innovation," the Paris-based institution points out. She is also in favor of «improve labor mobility, and access to vocational training would reduce inequalities in the labor market and boost skills. "
As ABC reported, the economy continues to destroy productivity, a field in which this indicator entered 2018 for the first time in twenty years. A fall that occurs at a time when the salaries begin to come back in Spain after the cuts and the moderation imposed by the crisis.
The education system is the protagonist in the OECD report, which insists on the need to improve results and in the spending on innovation and R & D. "Despite being reduced, school dropout remains high and workers' skills have to be better aligned with the future needs of the labor market," he says. It also defends a better quality in the teaching in the university and the learning with practices in the work.
Thus, he insists that vocational training continue to be reformed and that the dual vocational training model be extended, combining studies with work, a success story in countries such as Germany, Switzerland, Finland and Austria that is not having the desired success in Spain. He is also in favor of greater participation of employers in the design of training content that is impacted in Spain.
With regard to R & D expenditure, the OECD advocates that its evaluation be strengthened; that the funds are destined less to loans and more to direct subsidies based on results and that national and community policies are coordinated. And it puts the focus on the role that universities play. Of them it says that a greater specialization and size is encouraged. And how is this done? According to the OECD, distributing the resources according to the yields obtained, subjecting the Spanish university to an examination that compares it with international best practices, and expanding opportunities for qualified researchers.
Dismissal of temporary
The high temporality in employment is a classic in all the reports made by international organizations, including the OECD. On this occasion he encourages government to fight against abuses in short-term employment and also calls for a reform of the labor market that cuts the difference between severance payments for temporary and indefinite contracts.
And finally, the agency insists on eliminating the legal barriers that currently exist to the growth of the size of companies, that reinforces the Law of Market Unity, although it recognizes that it is complex to apply, and that professional services are liberalized, a pending issue that has been dragging on in Spain for years.
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