He sees increasing tax revenue as "feasible," but raising diesel tax or VAT on tourist apartments as difficult.
MADRID, 22 (EUROPA PRESS)
Technicians from the Ministry of Finance (Gestha) are proposing measures such as increasing the excise tax on diesel, applying VAT to tourist apartments, and introducing a new corporate tax rate for REITs, among others, to fulfill their commitment to the European Commission to reduce the amount of tax benefits this year by one-tenth of GDP, approximately €1.675 billion.
In a statement, they indicated that the Government has three ways to fulfill its commitment to the European Commission and highlighted that in the first half of this year 2.96 billion have already been recovered, mainly due to the reversal of the energy tax cuts (1.503 billion), the recovery of VAT on food (around 850 million) and the increase in taxes on tobacco, which together with the new Tax on Liquids for electronic cigarettes payable from April 1, has contributed around 157 million.
However, they have stated that the Ministry of Finance could take into account a measure requested by the European Commission to reduce tax benefits if the Government achieves a parliamentary majority to increase the excise duty on diesel to a maximum of 11.33 euro cents (VAT included) per liter to match that of gasoline, as already applied in many European Union countries, which could result in additional revenue of €1.162 billion annually.
The government could also add a larger or smaller portion of the €391 million annual exemption from lottery prizes, depending on whether the current threshold of €40,000 is reduced.
However, Gestha acknowledges the government's difficulty in convincing its parliamentary partners to increase the diesel excise tax, which has been pending since 2021 and which was again excluded last November from the latest tax package submitted to Congress due to lack of support.
Along these lines, Gestha noted that Spain received the fifth installment of the Recovery Plan for more than 23 billion euros this August, although 460 million euros remained pending payment until the approval of the modification of diesel taxation, one of two milestones Spain committed to for the fifth installment, which have not been met.
TOURIST APARTMENTS AND REITS
The third option identified by Treasury Ministry experts is other structural measures currently being discussed in parliament in separate bills from the PSOE (Spanish Socialist Workers' Party) and the Esquerra Republicana de Catalunya (Republican Left of Catalonia). These include the introduction of VAT on tourist apartments and the introduction of a new corporate tax rate for REITs (Socimis), real estate companies that do not allocate a substantial portion of their homes to affordable rentals, among others.
However, they have warned that, with the advanced parliamentary calendar, both initiatives are unlikely to come into force in 2025 and would, at best, be implemented from 2026.
"The Government has several options to fulfill the commitments made to Brussels, some measures agreed upon at the European level that, if approved, would effectively and immediately strengthen tax collection to consolidate public accounts and sustainably increase public spending on policies to strengthen the welfare state," said José María Mollinedo, Secretary General of Gestha.
