Instituto de Estudios Económicos
Informe sobre competitividad fiscal 2022 en España

Tax burden in Spain at all-time highs and above the EU average

The Institute of Economic Studies (IEE) has published the Tax Competitiveness Report 2022. According to the report, Spain is ranked 34 out of the 38 countries analyzed according to the fiscal competitiveness index (two places below 2021).. The IEE considers that the increase in tax revenue should be based on an increase in the tax base and the fight against tax fraud, and not on tax increases that reach record levels of tax collection and tax burden above the EU average.

According to the report, taxpayers in Spain already bear a tax burden comparable to, or higher than, that of similar countries, taking into account the following data:

  • Record tax revenues in 2022 and 2023, well above GDP growth: tax collection exceeded historical records, a figure that is intended to increase, as tax revenues budgeted for 2023 exceed 2019 figures, by almost 50 billion euros, representing a 23.4% increase, while, in the same period, GDP has increased by 11.5%.
  • Tax burden in Spain increasing and above the EU average: The tax burden in Spain (tax revenues/GDP) has reached record highs in 2022, exceeding 42% of GDP and, therefore, above the EU average (41.7% with data from 2021 which are the latest available). The report estimates that the tax burden will rise in 2023 to 42.3% of GDP due to the introduction of new taxes or the reform of existing ones. According to the report, these tax increases tend to prolong crises and slow down the return to growth and the path of public debt reduction.
  • Some of the major OECD economies have cut taxes: Germany has temporarily lowered VAT and announced a reduction in the burden of social security contributions on wages; in the United States, France and Italy, anti-crisis fiscal measures have been marked by a refusal to raise taxes and a desire to create a tax climate conducive to rapid recovery.
  • In Spain, the share of tax revenue coming from companies is higher and far higher than the European average, since the public revenue contributed by companies is 32.5% of the total in Spain, while the average for the Eurozone is 23.9%. In relation to GDP, the corporate tax burden is 10.8% of GDP compared to the EU average of 10.2%.

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