Budget machinery in progress

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This week the process of the State Budgets to his first vote in the Congress of Deputies. On Thursday, the budget expenditure ceiling is expected to be debated and voted in full (with a 3.8% rise) and the distribution of a deficit target 1.8% of GDP between different levels of public administration.

On Thursday the parliamentary majority which granted the Presidency of the Government to Pedro Sánchez. And before that, on Tuesday, the full Congress will also vote taking into account the proposal of socialist law to strip the Senate of veto capacity on the voting of the expenditure ceiling conferred by the current wording of the Stability Law.

The budgetary machinery is thus set in motion on a parliamentary path sowed with uncertainties by the independence plot of Catalonia.

For now, this week’s debate is in the numbers. Between the expenditure ceiling proposed by the Government and the fixed deficit target there are some tax increases that create the different political positions of each other.

It may be against raising taxes, as they preach PP, Citizens or Vox. You can even criticize the optimism of revenue forecasts for the ‘Google rate’ and the tax on financial transactions. Or attack plans to drive a minimum taxation 15% for large business groups.

What can hardly be argued is that these types of initiatives are going to countercurrent of the global debates.

This weekend, his own US Treasury SecretarySteven Mnuchin has noted at the G20 ministerial meeting in Riyadh (Saudi Arabia) the progress in favor of a minimum imposition of multinationals.

Spain is one of the few countries that have fulfilled the OECD mandate to publish the worldwide taxation of its multinationals, without citing names. The 134 Spanish multinationals that invoice more than 750 million in the world, supported in 2016 a global average taxation of 12.6% and for 27 of them the load was 0.3%.

Slower is the debate about the design of a common rate on digital activities. In Riyadh, the US has continued to put sticks on the wheels of the debate. The OECD intends to define what part of the Corporation tax should be taxed in territories where large technology companies exercise their activity but do not have a registered office. The US wants each technological multinational to decide whether or not to accept the new scheme, in exchange for some type of administrative advantage. It is what Mnuchin calls euphemistically “Safe Harbor” and what Europe interprets as a way of escape.

The Facebook director, Mark Zuckerberg, has been willing to submit to the new digital taxation in which the OECD works. But it should not confuse this attitude with a possible access door to a hypothetical “safe harbor” where the European regulation of data protection and democratic rights is relaxed.



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