The Government promises Brussels a massive tax increase of 80,000 million to match the EU




The accounts for 2022 are already in the Congress of Deputies and now also in the hands of the European Comission. The Government has sent its budget plan for next year to Brussels to obtain the EU approval of its calculations. But beyond the auguries of recovery and expansion of spending, the great promise is thought for as of 2023: a fiscal revolution.

The Executive has promised Brussels that it will undertake a massive tax increase, once it has the conclusions of the group of experts for the Tax Reform, which must submit its report in February. It will be there when La Moncloa begins to design the tax scheme that will govern Spain in the future and which will greatly increase income.

Thus, the Government’s plan indicates that its goal is “to bring Spain’s tax levels closer to the average of the neighboring countries, since Spain presents a negative income differential in relation to the European Union, especially in environmental and digital figures ”, according to the document. This gap that exists with Europe is estimated at just over seven points of GDP, which would be equivalent to about 80,000 million euros.

It is not detailed what measures will be adopted in particular to increase the collection to resemble the EU since they will still wait to have the report of the experts. However, some ideas do slip in. «It is necessary to improve the collection and the efficiency of the tax system through the widening of the tax bases reduced by the numerous exemptions and deductions, evaluating if the existing tax benefits achieve the objectives for which they were created, or if they should be revised. Likewise, the current tax figures must be analyzed in depth to adapt them to the economic context, and advance in the incorporation of new taxes in accordance with the most recent trends, “says the Government.

The review of tax exemptions and deductions is something that has already been emphasized by the Tax authority and, in this case, the Executive picks up the glove and endorses that approach. As for reviewing existing taxes and creating new ones, as he has already been doing, he does not provide further details.

«The reforms proposed by the committee must properly calibrate the current economic moment and the expected one in the medium and long term, so that without losing sight of the fundamental principles that should inspire the reform, such as fiscal consolidation, legal certainty, simplification of the system, modernization of the same, strengthening of taxation in under-taxed areas (environmental or financial field, among others), succeed in hitting the appropriate times for the entry into force of each modification, so that it does not slow down the economic recovery, but allows tax revenues to be progressively closer to the average of the Member States “, the budget plan deepens.

It also bases the need to review the entire tax system on being able to tackle the structural deficit, which has not stopped growing in the crisis of the Covid-19 for the spending decisions derived from the pandemic and also for other political decisions of this Government. Currently the structural deficit is moving towards 5% of GDP; In this sense, it should be noted that the European fiscal rules prior to the pandemic set a theoretical maximum annual deficit of 3% (non-structural).

Starting from this structural deficit, Spain would find itself in a delicate situation in terms of its public finances. Moreover, by 2024, according to the government, the gap in the accounts is still expected to be 3.2%, above the aforementioned fiscal rules. Although it remains to be seen what standards will be returned after the Covid, which will begin to be discussed in the coming months at the community level.

The budget plan also serves to send a message to Brussels that the Government aspires not to lose sight of the sustainability of public finances, although in these accounts State spending continues to rise and disbursements are consolidated that with the pandemic would have to be temporary. “It is necessary to reiterate that the Government’s commitment to budgetary stability and fiscal consolidation, with public accounts that seek to advance in the reduction of the public deficit “, indicates the document.

Taxes in 2022

The Executive recognizes that next year’s accounts “will not incorporate a large number of tax measures, since the in-depth reform of the system will occur once the proposals prepared by the committee of experts have been analyzed,” but that They have included some actions in search of greater progressivity.

These are mainly three. First, the establishment of a Minimum rate in Corporation Tax of 15% for large companies, and 18% for banks and hydrocarbon companies.

Second, a reduction in deductions for contributions to individual pension plans is established, which decrease from 2,000 euros to 1,500 euros. By contrast, those relating to business plans are extended to 8,500 euros. Among the Government’s plans is to continue punishing individual savings since they consider that it especially favors the upper classes and not the lower and middle classes.

Thirdly, a reduction in the percentage of rebate on the income derived from the rental of houses to entities dedicated to rent has been set in the Budgets, going from 85% to 40%. That is, the great landlords.

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