Spain’s labour minister proposes tax reform, boost ‘social economy’

Large Spanish companies and wealthy people should pay more taxes and contribute to building a social and fairer economy, Labour Minister and new left-wing party Sumar leader Yolanda Díaz announced Wednesday.

Díaz announced an in-depth reform of the Spanish corporate tax “so that large companies contribute more and small companies much less” if she becomes Spain’s new prime minister after the elections due on 23 July, she said in a conference in Madrid.

She also advocated for “a calm debate” to make permanent the tax on large fortunes, designed as a temporary measure by Spain’s governing coalition composed of the socialist party PSOE (S&D) and Unidas Podemos (The Left).

“This is not about raising or lowering taxes, but about who pays taxes”, Díaz stated, adding that the Spanish economy needs a “structural tax reform” because it has a taxing “that do not reflect the social or economic reality”, CincoDías and EURACTIV’s partner EFE reported.

“There is fiscal injustice, it is real, and there is a constitutional mandate to do so”, Díaz insisted.

The rich should pay more

A small company in Spain is currently taxed at 17.5% and a large corporation at 3.8%. The tax reform that Díaz and Sumar promote is based on the principle that “those who have more should contribute more to the country”.

Sumar also defends a change in the system of personal income tax collection (IRPF), “because 85% of its collection comes from salary income and this is not fair in democratic terms”, Díaz pointed out.

The reform planned by the current government must include alternative forms of taxation “for the green and digital transitions”, including “feminist taxation”, which must also be addressed in this structural tax reform, she explained.

In Dáaz’s view, the tax reform is only one of the four major reforms that the country needs, the other three consisting of measures to control businesses’ profit margins, to narrow the productivity gap between the Spanish economy and its competitors, and a business reform democratising businesses functioning.

Spain is 25 points below the EU average productivity, Díaz lamented. “It is essential to talk about it” because “it is the main factor in the country’s growth and wealth”, she stressed, adding that “it is not only a figure but an essential condition for the welfare of our country”.

(Fernando Heller | EuroEFE.EURACTIV.es)