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Spanish FM Says Tax Reform Showing Positive Results

by Ulrika Lomas, Tax-News.com, Brussels

16 January 2015


Spain's Secretary of State for Finance, Miguel Ferre Navarrete, has said that the tax reform package enacted at the start of this year is already boosting Spain's economic growth.

Navarrete said that the reform package, which included a reduction in the tax burden for low-income taxpayers and reductions in tax rates on savings income, will boost the disposable income of taxpayers by roughly EUR9bn (USD10.5bn) over two years. This will lead to higher consumption, which will in turn boost gross domestic product (GDP), he said.

The Secretary also said that the reform of the corporate income tax will create a more competitive business environment. He pointed out that Spain will have a lower rate of corporate income tax than some of its major trading partners, such as France, Germany, and Italy, as a result of the reform. The rate was reduced from 30 percent to 28 percent at the beginning of this year and is due to fall to 25 percent in 2016. A reduced rate of 15 percent applies to companies formed in 2013 or 2014, for two years.

The reform package also includes measures to help small- and medium-sized enterprises (SMEs) to grow in size and improve their competitiveness by developing economies of scale, Navarrete said.

The tax reform is expected to boost Government revenue by 0.55 percent of GDP within two years of its implementation, and support economic growth of two percent this year.

TAGS: environment | Finance | tax | economics | business | fiscal policy | gross domestic product (GDP) | corporation tax | tax rates | France | Germany | Italy | Spain | tax reform | individual income tax

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