Options for Reforming the Spanish Tax System

Isabelle Joumard and Aristomene Varoudakis

No 249, OECD Economics Department Working Papers from OECD Publishing

Abstract: The recent tax reforms have improved incentives to work and removed barriers to the internationalisation of Spanish firms, and have helped to make the tax system simpler and more neutral, especially as regards saving. However, the structure of tax wedges, combined with significant labour market rigidities, continues to inhibit job creation, and particularly job creation for the unskilled. Furthermore, certain tax privileges, in particular incentives favouring owner-occupied housing, and the multiplicity of tax rates and systems applying to business profits, hamper economic efficiency and/or weaken income redistribution. Also, while the territorial authorities’ taxing powers have been increased considerably since 1997, they remain modest by comparison with their prerogatives as regards spending. The absence of adequate mechanism for controlling expenditure at the territorial level, plus the tax revenue guarantees extended to the regions by central government, could jeopardize ... Les réformes fiscales récentes ont renforcé les incitations à travailler, levé les barrières à l’internationalisation des entreprises espagnoles, et ont contribué à la simplification et une plus grande neutralité du système fiscal, en particulier vis-à-vis de l’épargne. Cependant, la répartition de la charge fiscale, associée à d’importantes rigidités sur le marché du travail, pénalise encore la création d’emploi, et en particulier l’emploi peu qualifié. De plus, certains privilèges fiscaux, en particulier les incitations à l’acquisition d’un logement ou la multiplicité des taux et régimes d’imposition des bénéfices industriels et commerciaux, ont des effets critiquables sur l’efficience économique et/ou la distribution des revenus. Par ailleurs, les pouvoirs des autorités territoriales en matière d’impôt, s’ils ont été considérablement augmentés depuis 1997, restent faibles au regard de leurs prérogatives en matière de dépenses. De fait, l’absence de mécanisme approprié de ...

Date: 2000-06-20
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