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Government to correct capital gains tax to combat speculation
The Minister of the Treasury and Public Administration Services, Cristóbal Montoro, announced in the Lower House of Parliament on Thursday that the Government will correct the current regime governing the capital gains system in order to “combat speculation” in the markets.
During the parliamentary debate to ratify the decree on measures aimed at correcting the deficit and fostering competitiveness, Cristóbal Montoro stressed that the existing system in which capital gains are taxed at a single rate is profoundly unfair because “everything one can earn on the Stock Exchange in a single morning” is taxed at a single rate while the earnings of a worker are taxed at progressive rates.
The Government aims to correct the regime, which was introduced in 2007, in forthcoming draft legislation so as to bring it into line with the system in other European countries that are similar to Spain in specific weight. The minister also stressed that the Government is correcting the system of Corporate Income Tax in order to recover the revenue lost in previous years due to the lax application of this tax.
In his speech in defence of the decree on urgent economic measures, Cristóbal Montoro also highlighted that “we must sacrifice that which cannot be financed”. “The people need to be told this openly: Spain’s obvious weak spot is its external debt and this issue must be resolved; financing services with more deficit and more debt will simple push us over the brink”, he said.
The minister warned that the new public deficit reduction scenario maintains the budgetary consolidation effort because Spain is still in the middle of its excessive deficit programme that was launched in 2009 and must follow the recommendations made by the EU, as agreed at the most recent Council of EU Economy and Finance Ministers (ECOFIN).
No wage cuts
As regards the civil service, the minister recognised the effort being made and that will be made over the coming months by the hundreds of thousands of civil servants in Spain but rejected the argument that the quality of public services will deteriorate if these people are asked to work more.
He also explained that there will be no reduction to civil service wages in terms of their salary but rather that the Christmas bonus will be withheld this year and compensated for as from 2015 through contributions of an equivalent amount to pension plans.
“What we have approved is not a 5% wage cut as was the case two years ago but rather a relatively short delay in receiving this year’s Christmas bonus”, he said.
Parliamentary unity
The minister took the opportunity provided by the debate to ask the opposition to exercise “realism and humility” so as not to project an image of political division overseas. “What we need right now is unity among all our political forces; the worst thing we could do is project an image of division to Europe, which is watching us extremely closely”, he said.
Cristóbal Montoro added that action is being taken “out of necessity” and that means it is vital “to put aside the ideologies of each party given the seriousness of this situation”. In this regard, the minister said that the Government is calling on society to make a greater effort even though the key is also to be found in the EU.
“We will recover from this crisis by applying more Europe”, he stressed.
Source: Lamoncloa.gob.es
- lawyers in Spain, Public deficit, Spanish Capital Gain Tax,