The IMF has recommended that Spain should expand the indirect tax burden to accelerate the economy and reduce debt. The areas of recommendation set out in the report include increasing excise duties and environmental levies as well as gradually phasing out the reductions and exemptions from value-added tax (VAT).
The IMF noted that the Spanish government has already started reforms to change the impact of the tax burden from direct tax towards indirect tax. The IMF also pointed out that the Spanish Government’s decision to cut the corporate tax rate from 30 percent to 28 percent this year, and to 25 percent from next year, will make it easier for companies in the country to expand their operations.
