Maria Pachon |
Madrid, (EFE).- The expert committee for tax reform drew up a guide a year ago to move towards a simpler, more ecological and progressive tax system, but the need to tackle inflation has led to a series of general measures and “patches” that distance and even contradict their recommendations.
The professors and members of the committee of experts Violeta Ruiz Almendral and Xavier Labandeira agree, in statements to EFE, that the Government has done little follow-up on their report, although some of their proposals would have been very useful in a context of high prices such as the lived last year.
The escalation of prices “did not recommend the immediate application of the proposals in the energy-environmental field,” admits Labandeira, referring to the recommendation to raise the tax on fuels, but points out that there were ideas “especially valid to promote savings and energy efficiency” that have not been followed.
Instead of advancing towards this saving to guarantee energy security, “the response was the opposite, with the generalized subsidy for the consumption of automotive fuels”, he adds, which does not encourage environmental improvement and implies an enormous cost.
“The Government has not followed the central elements of the white paper”, underlines Ruiz Almendral, and gives as an example the reductions in VAT for electricity or food, when the reduced rates are precisely one of the “holes” in the system that the report He urged to correct -he advocated suppressing the reduced VAT rates in exchange for a lower general one-.
The single VAT rate was part of a set of proposals aimed at simplifying the system through the elimination of bonuses and exemptions in various taxes that would be complemented with transfers for vulnerable groups to offset this higher tax burden.
“The compensatory strategies defended in the white paper could have been adopted: not linked to energy consumption and limited to vulnerable groups,” says Labandeira, in line with the aid of 200 euros, but “more stable over time,” he agrees. Ruiz Almendral.
However, Funcas researcher Desiderio Romero defends that despite the urgency of simplifying taxes such as personal income tax or companies, an environment of uncertainty like the current one “is not the most appropriate time” for a comprehensive reform.
Complexity and “patching”
Beyond specific measures, the “change in philosophy” defended by the white paper has not permeated fiscal policy, since the creation of three temporary and extraordinary taxes -for banks, energy companies and large fortunes- represents a new “patching”, according to Ruiz Almendral, a “socially accepted” formula to increase collection that avoids facing real problems.
In the case of the solidarity tax for large fortunes, the formula adopted is “technically criticizable” for the teacher, who recalls that the wealth tax is state and the Government could have established a common minimum for all regions as proposed in the book target instead of creating a “parallel tax”.
The measures adopted in the last year “are introducing more complexity” into the system, agrees Romero, who adds that “the spirit of the reform is not being applied” because “a temporary tax is not the most appropriate.”
Tax reform in the air
The tax reform was one of the great economic objectives of the Government and for its preparation it commissioned a report to a committee of experts that was presented in the form of a white paper on March 3, 2022, barely a week after the Russian invasion of Ukraine and with skyrocketing energy prices.
The context thus conditioned the future of the document – which in its almost 800 pages presented an exhaustive diagnosis of the problems of the Spanish tax system together with more than a hundred proposals for improvement – and of the tax reform itself.
The Minister of Finance, María Jesús Montero, already ruled out any short-term tax increase in the presentation itself, thus cooling expectations regarding the tax reform committed to Brussels, which after a turbulent 2022 has been reduced to a few measures.
Montero defends that the Government’s fiscal policy is in line with what has been committed to Brussels, since it advances in progressivity (with greater taxation for capital income and a drop in personal income tax for low incomes) and small advances in environmental taxation, such as the new taxes for waste and single-use plastics.
The experts acknowledge the contributions, but are pessimistic about the future: “A reform is impossible” in an election year, Romero ditch, who recalls that expert reports traditionally remain as a “reflection exercise” because “governments do not make reforms integral, but patching”.
“It is never the time to raise taxes,” Ruiz Almendral ironically, due to the generalization of “the idea without scientific basis that raising taxes reduces growth,” although he is confident that the analysis of the system carried out by the report can serve to the future.
Labandeira, for his part, urges to resume the energy-environmental proposals to advance in the ecological transition, for example with incentives in the registration tax, a reform pointed out by the Government in a recent report sent to Brussels, although the Treasury rules out that it is its implementation planned.
The reform of environmental taxation, one of the areas in which Spain is most decoupled from the European Union, has been left in the air -with measures that ranged from equating the taxation of diesel to a rate for plane tickets-, as well as the imposition of a common minimum for inheritance tax or the single rate of VAT.
But the white paper not only addressed large taxes, but also urged to solve small imbalances in the system, for example by exempting from taxation collaborative economy activities that in practice nobody declares, such as shared transport or home exchange, and that They are also waiting.
