AEDAF has recently organized its session on the government tax reform in which the consequences of increase VAT rates.
«Reflection on the Tax Reform. Indirect Taxation » brought together Ruiz Gallud, former AEAT director, and Begoña García-Rozado, Iberdrola Global Director of Taxation and former Deputy Director General of Tax on Legal Persons, both members of the Spanish Association of Tax Advisors.
VAT is the tribute of second highest grossing After personal income tax, about 35% of the total collection of taxes managed by the AEAT (in 2021 revenue of more than 70,000 million euros in VAT is expected). In the General State Budget Law for 2021, the VAT rate applied to soft drinks has been increased, which are now taxed at the general rate.
In his speech, Salvador Ruiz Gallud stated that “The correction of the public deficit in Spain must, without a doubt, begin with an adjustment in spending, at very high levels and without any rebalancing plans being formulated in the medium and long term. Only if, then, the need for an increase in taxation continues, an increase in the general VAT rate could be considered, even for a limited time (such as two or three years). If this measure is adopted, corrective subsidies for potential undesirable effects on the neediest groups of citizens would have to be simultaneously enabled ”.
The tourism sector
According to Ruiz Gallud, “Tourist services (restaurants, hotels, passenger land transport) should not be affected by a rate hike in the current moment of recovery after a major economic crisis”.
For his part, Begoña García-Rozado stressed that “Taxation should be used as one of the driving mechanisms for change and to help achieve environmental objectives.”
The rapporteur has claimed “A reform of the environmental tax system whose objectives are coordination, the general scope of both producers and consumers, the principle that the polluter pays, and the elimination of double taxation” , with the reform project of the energy tax directive (2003/96 / CE) as a reference.