Spain would solve its debt problem in 2013 if it places fraud in the EU average
- The technicians of the Treasury estimate that they would raise 38,500 million more, equivalent to the payment of all the interests of the next year.
- They denounce the reduction of 7.7% in the budget of the Tax Agency.
Spain will have to pay 38.59 billion euros in interest on public debt over the next year. They are more than 105 million a day, on average; a figure that drowns public accounts and largely neutralizes the efforts and cuts undertaken since May 2010 to reduce the deficit. This figure, however, would be obtained this year, without raising any tax, only equating the rate of tax fraud to the European average (around 13%).
State revenue would increase by about 38,500 million euros if the Spanish rate of submerged economy – which currently accounts for 23% of GDP, about 244,000 million – was reduced by 10 points and homologated to the Europe of 15, according to calculations elaborated by the union of technicians of Hacienda Gestha. The group of sub-inspectors, which groups some 8,000 people, proposes, among other things, that the law be changed so that they can investigate “the big bags of fraud”.
The tax evasion of large fortunes and companies accounts for 72% of the total And is that the tax evasion of large fortunes and large companies accounts for 72% of fraud in Spain, and reaches 42,000 million euros a year. They are the biggest part of the pie, and yet only one in four inspectors and sub-inspectors are dedicated to overseeing them, as Gestha denounces. And it’s getting worse, in view of the PGE.
Despite the announcement of Minister Cristóbal Montoro that the fight against tax fraud would be one of the items that would not be reduced in the General State Budget for 2013, the truth is that the Tax Agency will have a budget of 7.7% less next year. The template, as well, will be reduced by more than 200 employees . The Government expects that the Treasury, however, will perform 10% more inspections and collect about 9,130 million, an increase of 11.74% over this year.
The cut applied in the Treasury is not the only one of some Budgets marked by the surge in debt and the reduction in spending. 20 minutes analyzes some of the main developments in public accounts next year.
The PGE of 2013
Unemployment benefits fall . The Government will allocate 26,696 million euros to pay unemployment benefits, 6.3% less than this year, and that despite their own forecasts, the unemployment rate will not fall, but will remain at current levels . Of course, expect that 72,500 people lose their right to benefit. In addition, the public accounts show that the aid of 400 euros for long-term unemployed people who are running out of benefits – the so-called Prepara plan – will be extinguished in February and no extension is foreseen.
The educational policy will suffer a general cut of 14.4% . Tax benefits grow . The State will stop entering up to 38.986 million due to the “tax benefits”, those deductions or deductions that citizens and companies can apply when paying their taxes. The majority of these exemptions will be applied in the VAT – some 16,000 million – followed by another 7,000 million that will be applied for the promotion of work.
Yes the scholarships are cut . Last Thursday, the Government proclaimed that the scholarships were, along with debt and pensions, the only three items that increased in the Budgets. It was not true, at least in part. The program of scholarships and grants to students will have a 3.8% less in total, although “the most representative” (university and non-university) have increased by 2.4%. The education policy will suffer a general cut of 14.4%, although the Secretary of State for Finance, Antonio Beteta, called on the autonomies to prioritize their spending in this heading and health (in the PGE also falls a 22.6 %).
The deficit skyrockets . The aids to the banking have supposed a new revision of the figures of deficit of the State as much in 2011 – it arrives at 9,44% – as in 2012 – 7,4% -.
Public debt at maximum. The lag in public accounts and the financial rescue will also trigger the levels of public debt, which in 2013 will reach 90.5% of Spanish GDP. To face all payments, Spain must request more than 200,000 million over the next year.
Infrastructure falls. Investments in infrastructure are reduced by 15.6% next year. Those of railways -3,778 million- and roads -1,624- will be the main items.
Some very optimistic accounts?
The General State Budgets for 2013 are based on an “overly optimistic” macroeconomic picture, according to experts consulted for 20 minutes. The scenario contemplates a fall in GDP of 0.5%, when the vast majority of international agencies and study services predict falls above 1%. ” Poorly planned budgets have many implications , not only in meeting the deficit,” says José García Montalvo, Pompeu Fabra University professor of economics.