Spain’s fiscal effort outstrips EU average by 17.8%: IEE

Spain’s High Tax Competitiveness: Fiscal Effort, Corporate Tax, and Regulatory Pressure

On Wednesday, the Institute of Economic Studies (IEE) revealed that Spain’s fiscal effort is 17.8% higher than that of the European Union, with a forecasted fiscal pressure of around 39%, as indicated in the Tax Competitiveness 2023 report. The report highlights that the increase in tax revenue forecasted for 2023 will exceed GDP growth, leading to a higher fiscal pressure in Spain.

The tightening of business taxation in Spain is expected to slow down economic growth, according to the president and general director of the IEE. Specific data shows that Spain’s Corporate Tax and social security contributions from businesses represent a larger percentage of GDP compared to the EU average. This decline in tax competitiveness has been significant in recent years, ranking among the worst within the OECD.

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

In order to support economic growth and investment, it is crucial for Spain to address its tax competitiveness and reduce regulatory fiscal pressure by comparing its policies with other European and OECD countries. By doing so, it can better understand its impact on businesses and individuals

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