In his study, the professor of the Faculty of Economics Amadeo Fuenmayor  analyses two main ideas related to the fiscal measures. First, it is important that the taxes do not generate new problems in addition to those deriving from the forced economic lockdown. Second, future crisis should take place in a more solid and fair fiscal system to confront unexpected considerable expenses incurred in a short run.

With regard to the first idea, the Spanish government already pointed out a few days ago that certain measures will be implemented to defer the tax payments. According to Amadeo Fuenmayor, only some extra effort should be put. Some taxes will be adjusted automatically. This concerns the fractioned payment of the entrepreneurs and the freelancers. If the interests fall the following fiscal quarter, the income will also proportionally drop. Nonetheless, in a few days, the first fractioned payment should be made with regard to the first quarter, and it would be advisable to suspend it under the current conditions of uncertainty, stresses the head of the Department of Applied Economics. “In the end, when income tax declaration is presented next year, there will be time to settle all the accounts,” affirms Fuenmayor.

As the analysis shows, there are other taxes which do not depend on incomes or interests. One of them is the property tax. Valencia city council levies this tax in the period between March and May. Fuenmayor stresses that this case would not be such a bad moment to defer the payment given that everyone is waiting to see the results of the following crisis.

The second idea expressed in the analysis regards a fiscal system as a whole. Even though the taxes should be temporarily treated so as not to produce more difficulties, the fiscal system should become more robust in future. The incomes will be essential to compensate for the great public deficit, which will surely take place in 2020.

“For this, the public sector should play a role to cushion the economic crisis along with the spending policies. But this is not a free service,” points out Amadeo Fuenmayor. The deficit transforms into debts, which cannot continuously grow. The spendings this year should be paid in the future. For this, the activity and the income should be recuperates, which will bring about tax levy.

The professor of the Faculty of Economics ensures that this period of time should be used to close the fiscal gaps of the past decades. They have been slowly but surely draining down the tax sufficiency: reducing the types of tax levy, especially for higher incomes, growing the importance of clearly regressive, indirect impositions; weakening the taxes over property basically centered on the rich; introducing the ways of more or less legal fiscal elusion through offshores within and outside the European Union, etc.

Amadeo Fuenmayor concludes that the authorities should take advantage of this moment to restore justice within our fiscal system.

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This information was elaborated as a part of institutional communication on behalf of the Principal’s Office of the Universitat de València. It is based on the study and information provided by the professor Amadeo Fuenmayor of the Faculty of Economics.