When the taxpayer becomes a client
The 31st of October marks the end of the Spanish Tax Agency’s Tax Inspection’s Intensified Action Plan against tax fraud, which has been described as arbitrary and confiscatory by the fiscal sector.
Last February, the Spanish Association of Tax Advisors (AEDAF) criticized the plan of incentives against tax fraud that the Spanish Tax Agency negotiated with its official’s representatives, which ends next 31st of October.
The tax authority’s goal was, solely, to increase tax collection from fiscal frauds. This plan offered a bonus to tax inspectors who were to succeed in increasing tax inspections’ collection.
These incentives would be included in the productivity bonus enjoyed by the officials in the voluntary and so-called ‘Spanish Tax Agency’s Tax Inspection’s Intensified Action Plan‘ (PEIA).
PEIA has a budget in 2016 of between 50-60m euros that are distributed as incentives to the officials who succeeded to increasing their results in their inspections against tax fraud. With this plan, the officials would work up to 20 additional hours in two periods: between March the first to the 30th of June, and July the first to the 31st of October; and they would obtain premiums (bonuses) for increasing the collection in tax inspections.
The tax advisors’ association criticized those “bonuses for tax bills that had been discovered” for being contrary to tax principles such as “principle of generality, progressivity, equitable distribution of the tax burden” and, especially, the “non-confiscatory” principle; a measure that is far from really pursuing tax fraud.
The Spanish Tax Agency has been implementing these incentives with its officials since 2013. Thus, in 2014 the Tax Agency collected 12,318 million euros in taxes, an increase of 12.5% compared to 2013. The revenue that contributed to the incentive plan was 2,262 million euros, 124% more than the previous year.
In this sense, AEDAF noted that this incentive program is not only harmful to taxpayers but also to the tax inspection itself because it encourages the focus on fewer inspections with lower collected amounts than on inspections regarding more considerate amounts of money but more difficult and expensive to investigate.
Therefore, they proposed other scales to incentivize officials, such as hours worked, the number of tax inspections conducted and their difficulty, their training and professional performance and interest in carrying out the work, among others.
The fight against tax fraud is necessary but the measures that are being conducted to eradicate it should not exclude the constitutional rights of citizens. The State has enough resources to fight tax evasion without questioning the integrity and assets of the contributors.
Del Canto Chambers’ Editorial Board