Tax Structure and Revenue-Raising Capacity in Spain: A Comparative Analysis with the EU

45 Pages Posted: 4 Sep 2015

Date Written: 2014

Abstract

This paper describes the revenue-raising capacity and structure of the Spanish tax system, in comparison with the economies of the European Union. Spain stands out for the low weight of its tax revenues in GDP relative to the EU27 average. This lower weight of tax revenue is mainly a consequence of indirect taxes (VAT, excise duties and environmental taxes). In fact, Spain has the lowest weight of consumption taxation in the European Union. As regards labour taxation, revenue raised as a proportion of GDP is similar to the EU27 average, although the weight of social security contributions in GDP, in particular those charged to employers, is higher. Spain also raises relatively more revenue from the taxation of capital, in particular from the taxation of wealth.

Keywords: fiscal pressure, tax structure, taxation in the EU

JEL Classification: H20, E62, H23, H24, H25

Suggested Citation

Hernández de Cos, Pablo and Lopez Rodriguez, David, Tax Structure and Revenue-Raising Capacity in Spain: A Comparative Analysis with the EU (2014). Banco de Espana Occasional Paper No. 1406, Available at SSRN: https://ssrn.com/abstract=2654817 or http://dx.doi.org/10.2139/ssrn.2654817

Pablo Hernández de Cos

Banco de España ( email )

C/ Alcalá 48
Madrid, 28014
Spain

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