OECD Calls On Spain To Expand Value-Added Tax Base

Spain could make its tax system more efficient by scrapping income tax exemptions and by increasing value-added tax and environmental taxes, a new report from the OECD says.

The OECD’s latest Economic Survey for Spain added the country should reduce employer social security contributions for low-wage workers on permanent contracts to support employment.

It said that despite lowering taxes in recent years, Spain has “room to improve the tax mix,” noting “the structure of taxation remains tilted towards labour income which penalizes growth and employment.”

The OECD also recommended VAT administration reforms, broadening the corporate tax base, and increasing excise duties in line with EU averages.