OECD Economics Department Working Papers
The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.
- ISSN: 18151973 (online)
- https://doi.org/10.1787/18151973
Options for Reforming the Spanish Tax System
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 ...
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