Fecha: Friday, 04 de June de 2021 a las 18:00h
The Jean Monnet Chair on Tax Integration in the UE held a debate in which, in the context of possible European tax harmonisation, the key points of a possible reform of the tax system in our country were analysed. The President of the General Council of Economists of Spain, Valentín Pich, took part alongside the Deputy Secretary General and Director of the Economics Department of Foment del Treball, Salvador Guillermo.
When an economist like Pich analyses taxes, he usually focuses on their impact on the overall functioning of the economy. For this reason, he warned us that our country has “a problem with tax on labour”. In his opinion, “Social Security contributions imply a tax on job creation, which is a handicap in a country with such high unemployment rates”. However, he recognises the complexity of introducing changes in this area, since this would require fitting them into a wider reform of the tax system as a whole.
In his opinion, the moment to address this situation was with the introduction of VAT in Spain. “We came very close”, but in the end the opportunity did not materialise.
With regard to corporate tax, Pich has highlighted that taxation with respect to GDP in our country is slightly above that of Germany. He also wanted to highlight the difference between tax burden and tax effort and the idea that “it is not GDP that is taxed, but people’s tax bases”.
On tax reform, he said that “the room for manoeuvre is limited”. As he described it, there is little room for new developments in the major taxes. There would indeed be progress to be made in the field of environmental taxation. According to him, the environmental issue must also be seen as a “factor for competitiveness” with the aim of “favouring certain industry types”. “What we mustn't see happen is to pile taxes on taxes”, he says. As such, he called for: “An environmental tax that needs to be powerful. People should know that, if they do certain things, they are going to pay it, but not that the tax appears on a bill mixed in with lots of other things”.
Harmonising direct taxation: mission impossible
In a debate convened to discuss European fiscal integration, Salvador Guillermo highlighted the difficulties in harmonising direct taxation: “A harmonisation process in direct taxation is impossible”. This is because European countries “have almost no sovereignty left in economic policy” and it is unlikely they will agree to cede remaining powers over direct taxation.
Guillermo made these assessments one day after publication of the Communication from the Commission to the Parliament and the Council on company taxation in the 21st century. As has already been said, what few new progress expected to be made will focus on the circumvention of tax bases and also on aspects such as “information sharing between states, the transparency of companies, the location of digital and the valuation and location of intangibles”, he listed.
He also devoted an assessment to environmental taxation, lamenting the fact that many figures grouped under this name do not really have a material connection with the environment. He gave as an example the water tax in Catalonia, in which “whatever you do, the minimum tax you can pay is as if you had consumed twelve cubic metres”. That is to say, it is not a tax designed to discourage consumption but purely for the purpose of increasing the amount of money collected: “Sometimes we try to whitewash something as environmental, when the purpose is really to draw in more cash”.
The debate was moderated by the director of the Jean Monnet Chair on Fiscal Integration in the EU of the University, Juan Corona.