President of Cuatrecasas, Gonçalves Pereira
“We are a single market, we are one country, and we should have a single tax system”
Is the fight against tax fraud the main challenge faced by Spain’s tax system?
It is one of the big challenges facing Spain, but it isn’t the only challenge or the most important one. But from the point of view of the economy and the country’s development it is a very important challenge, above all when we compare ourselves to our peers in the European Union.
Tax collection isn’t always linked exclusively to tax increases or changing laws. It is important to achieve an increase in the number of contributors. This is what will bring about a radical change to tax collection.
How can this problem be dealt with using the available measures and through the tax culture in Spain?
Culture is a primary aspect. In the United States there is a very strong tax culture, but this culture is achieved by putting measures in place. To compare with our European counterparts, in Germany every tax worker or inspector is responsible for eight hundred inhabitants, while this figure stands at two thousand in Spain.
Is the Spanish system full of loopholes for enterprises?
I don’t entirely agree that it is. There is a bit of demagogery when it comes to examining how large companies pay their taxes in comparison to medium-sized or small companies. If the ratio is compared with the tax bases applied it is actually quite similar: 18 percent as opposed to 20 percent. Tax laws determine certain types of behavior.
What changes would you recommend in the tax system?
Resources, communication, and transparency. It is important that the authorities apply consistent criteria. The law should be worked on to ensure that it is adequate. Courts and opinions should be in agreement on the issue of criteria. And when it comes to resources, we need to increase the number of taxpayers.
Are the disparities in the taxes paid between Madrid and Barcelona, for example, sustainable?
This is not advisable from any perspective. It doesn’t make much sense for Catalonia to be paying five or six percentage points more on their income than Madrid or Andalusia. Why is there a wealth tax in Catalonia and not in Madrid? We are a single market. We are one country, and we should have a single tax system. If we are part of a single market in Europe we should also ideally have a unified tax system.
How can this be achieved?
With a change in the way the autonomous regions are financed.
What does innovation mean in your field?
Technology is disruptive and cruel. Today, you can find contracts and other items online that were unimaginable in the past. Why does a member of the general public have to go to a lawyer if someone else can offer them the same service? Technology obliges us to provide types of services that others cannot provide.
Has there also been innovation unrelated to technology?
Yes. I can’t ask my young lawyers to do the same things we did forty years ago. Their aspirations are different. The balance between work and personal life is different, and that also means that ways of working have also changed. Some 55 percent of our lawyers are women. This normally tends to happen only in the first years of professional careers, but in our case we don’t want to lose female talent as it matures over time. We have to talk about these changes, since society has to go along with them.