CEOE shares the concern of the Health and Education sectors regarding the possibility that the next General Budget Law will end the VAT exemption currently applicable to hospital and educational services when provided by a private entity, and understands that This measure violates the fundamental right to freedom of choice of citizens.
CEOE understands that this measure would have little collection efficiency, since it would have a very negative impact on the demand for private health and education services by consumers, even more so in an environment of economic recession such as the current one; and it would lead to certain destruction of businesses and jobs.
This could have an economic effect contrary to that desired. As reflected by the Independent Authority for Fiscal Responsibility (AIReF) in the section related to health and education exemptions in its report 'Evaluation of Public Expenditure 2019', the increase in collection derived from eliminating the VAT exemption would be lower than the cost for the public sector of the need to provide those same services to those individuals who left the private system as a result of this modification.
Furthermore, Spanish businessmen consider that there are reasons to reject this tax change, since it makes it difficult for the private sector to participate in these sectors, which has been shown to allow improvements in cost, quality and efficiency.
Finally, as AIReF also recognizes, both exemptions, of a social nature and which aim to lower the cost of citizens' access to essential services, are widespread in EU countries, with no exceptions in health and with very few exceptions in education.