Montero receives the report from the expert committee, but rules out a tax increase at this time

The Minister of Finance and Public Administration, María Jesús Montero, received this Thursday the white paper prepared by the committee of experts on the reform of the tax system, but has ruled out that the Government contemplates “immediately making any tax increase” in the current economic context, still recovering from the pandemic and with the war in Ukraine, and has framed the report for “the medium and long term”.

Montero, who has received the white paper at the headquarters of the Ministry of Finance and from the president of the committee of experts, Jesús Ruiz-Huerta, assured that what the Government intends is to think about a structural reform of the tax system, but “in the medium term” and that can be “accompanied” to the economic situation of the moment.

In this regard, he stated that the Ministry of Finance “will take the necessary time to read” the 700-page document and to analyze each letter of the same “in detail”, and once it has been done, the Government will propose the reforms it deems necessary, seeking “the maximum parliamentary consensus.”

Reform for the next “months and years”

“Now it’s up to us, the Government itself, to study the report carefully, to see it in detail so that in the coming months and years we can formulate proposals that have the greatest possible consensus in the parliamentary arch for a fairer tax system that allows equal opportunities,” the minister reiterated.

In addition, he acknowledged that the delivery of the document is made in a “particularly tense” moment for the whole of international society, and from Europe in particular, due to the escalation of the war in Ukraine, which will have a “significant economic impact” and which, therefore, will make it necessary to “accommodate” the tax reform to these circumstances.

“The academic document is a roadmap, a design so that over the next few years we have a fairer tax system”, the minister insisted again, once again dispelling the possibility that the Government is going to undertake a tax increase in the short term.

The report does not reflect the position of the Treasury

Likewise, Montero has clarified that the committee’s report “does not reflect the position of the Ministry of Finance” and, therefore, it does not anticipate the measures that the Government will adopt and that, in any case, will always take into account the economic reality.

Montero, who thanked the experts for their work several times, and particularly that of its president, praised the fact that the white paper has been signed by the 17 members of the group and that a “unanimous” consensus has been reached in the most important elements of it, which, in his opinion, will serve as a “solid base” for the “necessary” reform of the tax system.

The Minister of Finance stated that Spain and Europe need a 21st century tax system, since up to now there has been partial initiatives to change certain aspects, but he advocated no in-depth reform “for the coming decades.”

In this regard, he welcomed the fact that within the EU and also the OECD progress has been made in a series of consensuses on taxation “that years ago seemed impossible”, and he was glad that the European Commission is currently drawing up several directives in this regard.

As the minister recalled, the Executive’s commission has focused on assessing from a tax perspective the business sectors that have emerged with new technologies and addressing tax issues that have been leading the international tax debate in recent years.

Thus, although the tax system as a whole has been analyzed, in the document, of nearly 800 pages, special emphasis has been placed on environmental taxation, corporate taxation, taxation of the digitized economy and taxation in emerging economic activities, as well as harmonization of wealth taxation.

The work of the experts

For his part, Jesús Ruiz-Huerta highlighted work “so intense” for 10 months that the committee of experts has carried out, all the members present at the document delivery act, and he trusted that he had fulfilled the mandate of the Ministry of Finance: to make available to society a “more equitable, progressive and fairer” tax system “, which incorporates environmental, digital taxation and the gender perspective.

“This is a broad set of tools that, in the medium term, guarantee the sustainability of public finances and that contribute to reduce the structural deficit and to the maintenance of the services of the Welfare State,” he assured.

Ruiz-Huerta indicated that the process was opened to public consultation and that about 80 documents were received, as well as the contributions of communities and municipalities and the support of the services of the Ministry of Finance and the Institute of Fiscal Studies, and stressed that the consensus achieved has been “magnificent”, although “it has not been easy”.

“The problems have been solved thanks to everyone’s efforts”, reiterated the president of the committee of experts, who also had words of thanks for Ignacio Zubiri and Carlos Monasterio, who left the group before finishing the work.

The Committee of Experts was established on April 12, 2021 and has a multidisciplinary nature, being made up of men and women of recognized academic prestige and who are professors of Economics and Financial and Tax Law.

During these months they have dedicated themselves to analyzing the tax system in its entirety and preparing a tax reform proposal, which they now deliver to the Government. With the reception of the White Paper, one of the milestones of component 28 of the Recovery, Transformation and Resilience Plan is fulfilled, according to the Treasury.

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