President of the Spanish General Association of Administrative Agents
“If no specific tax legislation is created to cover the self-employed and small and medium-sized enterprises, we are not going to be able to survive in terms of taxes”
Is the fight against tax fraud the main challenge faced by Spain’s tax system?
It should be one of the main challenges. The problem is that the fight against tax fraud means nothing unless it is accompanied by an attendant series of measures and ways of doing things. We have to deal with a range of issues linked to tax fraud. First, the very nature of our laws should discourage fraud. We must establish working methods and systems that will put a stop to fraud and the informal economy because there are many circumstances that tempt people to commit fraud that could be avoided in other situations.
What are the main measures that you would strengthen?
If we do not emphasize from the start that failing to pay taxes and contribute is something that goes against Spain’s interests and all Spanish citizens we are not going to be able to combat fraud, no matter how many laws we make: ultimately, compliance with the law depends on people’s behavior.
Is there an excessive number of loopholes in the Spanish tax system?
Yes. The Spanish tax system is so wholly complex and difficult to follow that it has a great deal of legal loopholes. Apart from that, there are no resources, money, or political will to tackle tax fraud as such.
Is the tax system too complicated for ordinary members of the general public?
Given that there are local, regional, and national tax regulations, some of which contradict each other, yes: it is absolutely impossible for a normal person to know everything about tax regulation in Spain. And so people cannot comply with it. Nobody in this country complies with tax regulations 100 percent because it is simply impossible; they don’t have the knowledge to do so.
What main reforms would you implement?
First, it is very important that somebody remembers to think about small companies, above all, as well as medium-sized companies and the self-employed. If no specific tax legislation is created to cover the self-employed and small and medium-sized enterprises, we are not going to be able to survive in terms of taxes. We self-employed people and small companies have done much more than the big players to pull us out of the crisis. But we must be careful: we must take into account that when we are talking about tax legislation we should often discuss everything that affects all tax types in general as opposed to solely fiscal taxes, since on many occasions when talking about tax cuts what we are really referring to is decreases to fiscal or contributory taxes. Nevertheless, social security taxes continue to increase, the most important fiscal item in the country.
Is it possible to reduce taxes on capital gains, for example, in one country and not in another?
Everything can be reduced, but we have to remember that this would implicate cuts to public spending. Such taxes can perfectly well be reduced in times of crisis. But we have to apply logic. We have to continue to establish the line of growth in tax on consumption and reduce certain taxes such as income tax.