Seminar by Xavier Vence, Professor of Applied Economics at the University of Santiago de Compostela.

Transition towards a circular economy involves systemic changes that affect every aspect of the economic life, since production to consumption and post-consumption, and they require the application of a politics combination that includes a wide range of tools.

The question is: which type of changes in the tax system can make an effective contribution to this transition?

This transformation has to be accompanied of a systemic change in the architecture of the tax system (prioritising taxes on non-renewable resources and deleting or reducing taxes on circular and renewable resources (including work, which is considered the most renewable resource). Taking into consideration the complexity and obstacles making it more difficult, at least in short and medium term, we suggest the need of a strategic roadmap where a sequence of gradual and staggered changes are stablished.

Those should allow important but feasible changes in short term, in particular, in VAT and Societies reforms, such as the elimination of harmful tax benefits and the introduction of favourable tax advantages to the economy.