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Why tax expenditures must be abolished

There is no single administrative body responsible for following and appraising the social profitability of tax exemptions or deductions

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Why tax expenditures must be abolished

For record, those who pay corporate tax (IS) have an outstanding debt to citizens. Of more than 44.8 billion of euros per year that raised Hacienda before crisis has reached a quantity that surpasses in little 23.1 billion. The effects of crisis, which some spokespersons of employer wield as a cause of this collapse, have spent time; The companies boast of growth of ir profits (some, already since 2014) before ir shareholders, so re is not today among Spaniards perception that y continue (in general, re will be exceptions) trapped in recession. The chasm between 2008 and 2015 (exercise with complete statistics) is best explained by silo of tax credits that companies keep. The tax proposal to force companies to pay at least 15% in societies has erected a wall of defensive reactions. Thus answered Juan Rosell, President of CEOE: "An excessive increase" of taxes that fall on societies "could have negative consequences".

For record also, companies accumulated in ir balance sheets fiscal assets of 166,269,000,000 in 2015, a deposit of sales that can apply with some discretion. Once tax liabilities were discounted, balance reached 116 billion. This tax balance in favor of companies will allow m to reduce ir full quota by approximately 32 billion. Clarification: Hacienda will thus be losing with data of 2015 a total collection of 32 billion in next statements of IS; But since those amounts are immovable, while y are consolidated as rights, abolishing tax benefits of companies would not imply collecting, in a coup or in deferred, 32 billion more, but would allow state that this deposit of rights Accumulated out of decline over time.

And why should tax benefits be abolished or minimized in IS? One reason could be that it is tribute where re is a greater difference between capacity of collection and real collection in times of "recovery of economy". But re is anor more disturbing reason: No one knows exactly what supposed beneficial effects are for society (investment, employment, security, innovation) that produces intricate tangle of exemptions, tax breaks and deductions that reduce Corporate tax bill. Especially big ones. There is no single agency or window in administration to verify compliance with tax expenditure budget (including those that apply to IS); Nor is re a single administrative body in charge of following and appraising social profitability of exemptions or advantages granted to tribute. The suspicion is that such tax advantages do not increase employment or encourage investment; But it would be nice if a neutral institution were to confirm or discard that impression.

Let's get back to Rosell's defensive positions. Imposing a minimum taxation of 15% is not a delimitation or an excessive increase; Especially when advantages of society are not exactly known, such an excessive amount of tax expenditures. The president of CEOE would need to clarify nature of se "negative consequences" so that citizens can calculate scope of warning.

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