A tax reform that is addressed when the recovery is settled and that includes a

VAT increase

;

numerous alerts due to the

high debt

accumulated by the economy;

and the finding that the

Minimum Living Income (IMV) has been a failure

given that it has fallen far short of the objectives that the Minister of Social Security, José Luis Escrivá, set for himself.

The Organization for Economic Cooperation and Development (OECD) has published its

Economic Study

on Spain

this Thursday

, and a document in which it makes an extensive and detailed description of the situation and the most pressing problems in the economy. And, of course, it includes the strong impact that the crisis derived from the coronavirus has had and the

uncertainties that still surround the recovery

, but also forward the measures that have to be carried out, starting with the aforementioned tax reform.

It should not be, he points out, something totally immediate since it is first necessary that the recovery be "

firmly under way

". But once that moment arrives, which the OECD does not specify, the organization urges the Government to carry out this reform. In this sense, it welcomes the creation of the tax expert group, and underlines that the revenues from VAT, excise and environmental taxes are significantly lower than the EU average.

The body led by Ángel Gurría has an impact on the VAT situation, a tax that is not the first time that it has recommended raising it, nor is it the only body. The Bank of Spain has also been favorable to its increase and AIReF has also defended that the reduced rates of

4% and 10% should be phased out

. The OECD, in fact, cites those conclusions of the Tax Authority, as well as the warnings that "tax benefits, exemptions, deductions and reduced rates represent a loss of income and distort the effectiveness of the tax system in Spain."

On the debt, and also in this case adding to the message of AIReF and the Bank of Spain, the OECD warns of the high level that the Spanish economy has reached.

It is currently at 120% of GDP, and the agency performs different simulations with data from 2050 ranging from 88% to a very alarming 170% of GDP.

And, in any case, it demands that

debt reduction be "a priority" in the coming years

.

In fact, the messages are so aligned and so evident is the need for a debt reduction program that the Government has not yet proposed, that also this Thursday the same AIReF has warned of the "high level of debt and the

position of great vulnerability

in which public finances have been located ".

And regarding the Minimum Living Income, the Organization indicates that the Government's objective was to reach 850,000 households.

However, in April 2021, almost a year after the implementation of the measure, income

had

barely

reached 250,000 households

.

This suggests, the OECD notes in its always restrained language, that "deployment has been slow."

Improve your forecasts

Likewise, the document contains an improvement in the economic forecasts for Spain both for this year and next.

In 2021 he estimates that the rebound will be 5.9%, which represents an increase of two tenths, while for 2022 he anticipates an expansion of 6.3%.

This is when the largest upward revision is made, since it estimates an advance of 4.8% in GDP so far.

According to the criteria of The Trust Project

Know more

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