Spain’s tax burden hit all-time highs in 2022, surpassing 42% of GDP and standing above the European Union average – of 41.7% - for 2021.
This is according to the country’s Institute of Economic Studies (IEE).
“The tax effort, i.e. the tax burden normalised according to income, is already 53% higher than the EU average”, said IEE President Íñigo Fernández de Mesa during a press conference to present the ‘Tax Competitiveness Index 2022’.
In addition, the report includes the Tax Competitiveness Index prepared by the Tax Foundation in the U.S. In this index, Spain is in 34th place out of 38 countries studied last year. This makes it one of the five nations with the worst tax competitiveness in the Organisation for Economic Co-operation and Development, having declined from 23rd place in 2019.
As Spain’s tax burden is forecast to increase this year, the Institute of Economic Studies is urging the government to look to neighbouring nations to circumvent effects such as investment relocation and taxpayer flight before focusing on any tax reform, The Corner reports.
“The competitiveness of countries is not only based on the good work of their companies and the quality of their products, or on the training of their workers, but also on the economic and regulatory environment, as well as the fiscal framework of the different territories,” according to the report.
The tax revenue should be focused on increasing the tax base, combatting tax fraud and promoting economic growth, according to the CEOE think tank, rather than increasing taxpayer pressure.
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