April 21, 2024 11:56 pm
IEE criticizes the excessive tax burden on companies in Spain

In 2023, Spain reached a historic record in tax collection, surpassing the figures of 2019 by approximately 50 billion euros. Despite this achievement, the Institute of Economic Studies (IEE) presented its Fiscal Competitiveness 2023 report, criticizing the high tax burdens placed on companies in the country. The report highlighted that while tax pressure in Spain was lower than the EU average in 2022 at 38.3%, it was still concerning for economic development.

The study emphasized the corporate tax in Spain, which accounted for 2.7% of GDP and Social Security contributions at 9.5%, both higher than the EU average of 3.3% and 7.1% respectively. The analysis revealed that social contributions to Social Security in Spain were significantly higher at 25.2% compared to the EU average of 17.7%, whereas corporate tax was slightly lower at 7.2%. However, these taxes combined in Spain exceeded the European average by 1.8 points, making it one of the OECD countries with the highest tax burden.

The IEE indicated that Spain’s fiscal effort was nearly 18% higher than the EU average, making it one of the OECD countries with the highest tax burden. The Tax Competitiveness Index revealed that Spain ranked poorly in terms of tax competitiveness among OECD economies, experiencing a decline over the last legislature despite improvements from the previous year. This loss of fiscal competitiveness due to continuous tax increases imposed by the government resulted in a significant gap between Spain and its ranking from 2019, indicating a significant loss of competitiveness for individuals and businesses alike.

The report also criticized property taxation in Spain as unfavorable and ranked second worst among OECD economies after Italy, further contributing to overall property taxes faced by individuals and businesses in the country.

In conclusion, while progress has been made over time to improve fiscal competitiveness in Spain, there is still much work to be done to reduce overall taxes faced by individuals and businesses alike if we want to promote sustainable economic growth for future generations.

It is important for policymakers to carefully consider their actions regarding taxes as they can have significant impacts on an economy’s growth potential and overall well-being of citizens.

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