IMF Urges Indirect Tax Shift For Spain

by Ulrika Lomas, Tax-News.com, Brussels

15 December 2016

Spain has room to increase tax revenues without hampering economic growth prospects by targeting exemptions and inefficiencies in the tax system, the International Monetary Fund (IMF) has said.

In the concluding statement to its 2016 review of the Spanish economy, the IMF said that Spain "has room to raise revenues," in particular by "gradually reducing the value-added tax exemptions." This would bring Spain into line with VAT systems in other European Union member states, the statement added.

Given the current environment of low energy prices, the IMF also sees scope to increase excise duties and environmental levies. Tackling "inefficiencies and special treatments" in the tax system could raise further tax revenue, it noted.

"In combination with the earlier reduction in corporate and personal income tax rates, such revenue measures would support the growth-friendly shift from direct to indirect taxation," the statement said.

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