Proposals for a more competitive taxation (I)

The executive committee and the board of directors of the Business Confederation of the Valencian Community (CEV), have approved the document “Proposals for a more competitive taxation (I) ”, prepared by the Economy and Taxation Commission, chaired by Laura Vicente.

The report analyzes the Tax on Economic Activities, the Tax on the Patrimony, the Tax on Inheritance and Donations, and the Tax on Patrimonial Transmissions and Documented Legal Acts, and proposes 30 concrete measures with which it will contribute to move towards a modern economy, dynamic, competitive, attractive for native and foreign investments, and with high levels of employment, disposable income and social welfare.

As explained at the meeting of the governing bodies, the ECV Economy and Taxation Commission is aware of the structural and cyclical context of the economy of the Community, of the corsetation to which the coffers of the Generalitat and of the municipalities, but also knows the fiscal pressure to which Valencian companies are subjected, as well as their needs to continue advancing in their levels of competitiveness and, thus, generate quality employment. For this reason it has presented this report with which it pursues a triple objective: to lighten the fiscal invoice of the economic agents that must continue generating economic activity and employment; match the tax burden to that in other economic enclaves of Spain and its surroundings, to reduce ballasts in competitiveness; and advance legal certainty and predictability, to reduce uncertainty and encourage private investments.

The CEV is convinced that the Fiscal Policy, in addition to providing the necessary resources for the maintenance of the social welfare State, must contribute to maintaining a dynamic, competitive and employment-generating economy. In this sense, a modern and competitive regional tax system is able to compensate for reductions in fiscal pressure with the multiplier effect of increasing the disposable income of more economic agents with more investment and consumption capacity: more collection with lower fiscal pressure

The Commission of Economy and Taxation proposes the elimination of the Tax of Economic Activities and the Tax of the Patrimony. The first taxation of economic activities that are already taxed in a manner adjusted by corporate taxes and income of individuals is not adjusted to business reality. Regarding the second, the temporary nature with which the tax began and its recovery during the last crisis as a source of income to support the maintenance of public spending are no longer sustained. However, until its elimination, the document approved by the CEV includes a series of subsidiary measures.

On the Tax on Inheritance and Donations, the CEV once again claims the extension of the reduction on a taxable basis from 95% to 99% for all companies, regardless of their turnover. Likewise, it proposes 5 more measures aimed at guaranteeing the subsistence of the company, protecting and promoting its continuity with the objective of continuing to generate economic wealth in our territory.

With respect to the Tax on Patrimonial Transmissions and Documented Legal Acts, the CEV indicates that the Valencian Community is one of the autonomous communities that most taxes the operations of Onerous Patrimonial Transmissions. In that sense, the CEV recalls that high levels of taxation do not favor the attraction of business, investment or talent to generate activity, work and reside in the Valencian Community. The opportunity cost is the consumption and investment not made in the Community, with its repercussions on the GDP, productivity and collection in personal income tax and VAT for the autonomous coffers.

Finally, the Confederation rejects the proposal for a 33% increase – from 1.5% to 2% – in one of the modalities of Documented Legal Acts, recently presented in parliamentary proceedings. This increase in taxation will penalize, in the first instance, a fundamental sector –the promoter and builder-, which after the severe crisis returned to recover and that is currently showing signs of stabilization. The increase in the tax burden not only reduces the levels of competitiveness for companies based in the Community, but will have its effects on activity, employment and, ultimately, on domestic consumption.

INTEGRATED REPORT: Proposals for a more competitive taxation (I)

Associative basis

Likewise, the CEV has approved the incorporation to its associative base of the company Equipo Humano S.L.U. Thus the Confederation closes 2019 with an increase, compared to the previous year, of 5% in the number of associates, which rises to 274: 143 associations and federations, which in turn bring together more than 500 organizations; 124 directly associated companies and 7 associate members.

Photo: Laura Vicente, president of the Economy and Taxation Commission of the CEV; Eva Blasco, president of CEV Valencia; Salvador Navarro, president of the CEV; Miguel Ángel Javaloyes, general secretary of the CEV and Inmaculada García, managing director of the Confederation

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