April 21, 2024 11:48 pm
Spain’s fiscal effort outstrips EU average by 17.8%: IEE

On Wednesday, the Institute of Economic Studies (IEE) unveiled that Spain’s fiscal effort is 17.8% higher than the European Union’s average, with a forecasted fiscal pressure of approximately 39%, as outlined in the Tax Competitiveness 2023 report. The tightening of business taxation in Spain is expected to hinder economic growth, according to the IEE president and general director.

The report highlights the increase in tax revenue forecasted for 2023, which will surpass GDP growth, leading to a higher fiscal burden on Spain. This rise in fiscal pressure is due to new taxes and reforms affecting business taxation, savings, and investments. Despite this, Spain’s overall tax burden on businesses and entrepreneurs remains above the EU average.

According to specific data, Spain’s Corporate Tax and social security contributions from businesses represent a larger percentage of GDP compared to the EU average. According to the Tax Competitiveness Index, Spain’s tax competitiveness has declined significantly in recent years, placing it among the worst within the OECD.

The IEE emphasizes that Spain’s regulatory fiscal pressure is significantly higher than the EU and OECD averages, particularly in terms of corporate tax and property tax. Additionally, personal income tax in Spain is also above the EU and OECD averages and is more progressive in nature. Overall, the combined tax rate with Social Security contributions in Spain is relatively high compared to other countries.

To support economic growth and investment, the report suggests that Spain needs to address its tax competitiveness and reduce regulatory fiscal pressure by comparing its policies with those of other European and OECD countries better understanding their impact on businesses and individuals.

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