• In Congress, the Bank of Spain asks to reform pensions now: private savings, not only paid by young people and transparency
  • Taxation: companies already pay more in Spain for corporation tax than in France or Germany

The Value Added Tax (VAT) is the figure in which Spain presents the greatest margin for improvement in its income compared to the European average. The data point to this and this was confirmed yesterday by the Governor of the Bank of Spain, Pablo Hernández de Cos, who during his speech in Congress explained that this situation is due to the greater number of products taxed with a lower rate than the general one. He told the Executive, therefore, in what form and in what way he can look for part of the income he needs to reach "the levels of Europe." And yet, VAT is practically the only figure in which the Sánchez and Iglesias Government agreement does not contemplate an increase.

"Tax collection in Spain, including income from social contributions, is less than the EMU average by about 2 pp. Around 40% of this difference is explained by lower VAT income, a consequence of the higher percentage of consumer goods priced at the reduced or super-reduced rate, "explained Hernández de Cos before the Reconstruction Commission.

Last year, this tax raised 71,538 million euros and was, after personal income tax, the second largest contributor. But as pointed out by the governor and stated on more than one occasion by the International Monetary Fund (IMF) or the European Commission , there is significant room for improvement. And for this reason, the different organisms have recommended the Executive to review the tax, acting especially on the number of articles that are in the reduced (10%) or super-reduced (4%).

But the Government agreement, as has already been pointed out, does not contemplate these recommendations at all . In fact, the few actions planned for VAT are the reductions in the "veterinary services and feminine hygiene products" tax rate. And that is the objective of the Executive, the Minister of Finance and government spokesperson, María Jesús Montero, also recalled yesterday, who also stressed that she is convinced that there is a "fiscal margin" to raise income through the lines already pacted: raising income tax on high incomes, rate Google , Tobin tax , harmonization between communities, green and corporate taxation.

Hernández de Cos also referred to the latter figure, noting that, although not as much as in the case of VAT, in Companies there is also room for improvement compared to the European average. However, in this case there is some discussion about whether the tax can really give much more of itself. Last week, the General Council of Economists was clear in pointing out that, according to OECD data and measured in relation to GDP or total tax revenue, the collection in Spain "is above France and Germany" .

The Government, on the other hand, rejects this speech, maintains that companies must pay more and, in fact, the tightening of Companies is one of the keys to its fiscal plan: it wants to impose a minimum rate of 15%, which would be 18% for banks and oil companies. And business representatives, of course, defend that they already pay high taxes and that the Executive does not take into account measures such as double taxation. What the data from the Tax Agency say is that last year the collection fell by 4%, to 23,733 million.

Proposals and warnings

Back to the appearance of Hernández de Cos, the head of the BdE warned of the severity of the crisis, that its effects will be persistent, and again demanded that politicians make long-term agreements with which to face the serious recession, the huge increase in public debt and the increase in unemployment. " I reaffirm the need for a political agreement of several legislatures, " he said, delving into what he had already stated in his previous speech in Congress.

He also called for concrete measures such as the immediate start of work to reform pensions, an area in which he opted for an intergenerational adjustment that prevents the next generations from bearing most of the adjustment. He also noted that "it makes sense to maintain ERTEs and ensure flexibility mechanisms for companies"; asked to review business insolvency processes; and rejected that there is a need to shape a public bank.

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