Spain Needs Considered Tax Changes
July 14, 2014 Taxation in Spain
MADRID – Spain needs to ensure that any upcoming tax changes are directly aimed at helping boost employment levels and economic production in the near future.
Even though Spain is seeing a resurgence of economic growth, the national government could still take more steps to foster economic growth and boost employment levels, while collecting greater levels of tax revenues, according to the results of a new assessment of the Spanish economy released late last week by the International Monetary Fund.
The experts of the IMF noted that Spain has now “turned a corner” and is seeing an improvement in its economic growth after years of austerity and muted economic activity.
It was also noted that the already seen improvement could be expanded even further through careful adjustment of the tax system, and that the upcoming tax cuts recently announced by the government provide “…a critical opportunity to support the fiscal consolidation goals with a more growth- and job-friendly tax system.”
In its report the IMF recommended that the government should have a closer look at using tax changes to encourage businesses to hire more employees, especially low-income individuals and the long-term unemployed.
Further, the government could take extra steps to boost its own tax revenues by raising the rate of VAT, hiking selected excise duties, lowering the personal income tax thresholds for the top marginal tax rate, and dropping some VAT exemptions, while simultaneously reducing the tax burdens on the incomes earned by middle and low income workers.
Photo By: Pablo Saludes Rodil