The Tax and Customs Administration is finalizing a plan to abolish fines for involuntary errors in the income statement
Tax collections continue to record record numbers month after month, in a year in which inflation has had a more than positive effect on the state’s additional revenue. Soledad Fernández, director of the Tax Office, emphasized yesterday that a quarter of the increase in collections until August – about 7 billion euros – was due to the price increase.
According to the agency’s latest data, tax revenues amounted to 181,830 million euros between January and September, almost 28,000 million more than in the same period of the previous year. That would mean, according to the Treasury’s estimate that 20% of that extra comes from the inflationary effect, that some EUR 6,000 million would come from the rise in inflation.
Speaking before the Congressional Treasury Committee, Fernández indicated that this inflationary effect affects in different ways depending on the tax figures, being VAT, as it is a tax closely related to consumption, the one most favored by the spiral rising prices.
In fact, the IRS itself indicates in its latest monthly report that “VAT revenue rose 19.6% through September due to spending improvement and price increases,” recalling that “CPI rose 8.2% between November 2021 and July 2022”, the period including VAT collection until September.
In addition to inflation, the good evolution of employment has also contributed to an increase in income from personal income tax. In concrete terms, deductions from work are increasing at an annual rate of 12.7% thanks to job creation, increases in wages and pensions and the increase in the effective rate that these increases entail.
The director of the Tax and Customs Administration also used her speech to announce that the service has already made progress in incorporating the so-called ‘right to rectification of an error’ into the legal system. A move that would, among other things, facilitate that taxpayers can correct any involuntary errors when making their income statement.
Currently, the simple fact that the draft is accidentally confirmed with incorrect information can lead to a fine of 150 euros. If that mistake causes the state to lose revenue, the fine could be even higher. And other types of errors, such as submitting documentation after the deadline or incorrectly calculating a bonus, are also usually penalized.
Since many of these petty rulings are not intended to defraud the treasury, the Tax and Customs Administration moves ahead so that it is the taxpayers themselves who, with prior notice from the administration, can correct their mistakes.
Incidentally, the proposal was already included in the so-called White Paper on Tax Reform, which states that it is “essential to improve the relationship of the Tax Administration with taxpayers, avoiding the impression of guilt and prosecution being transferred to those who usually correctly fulfill their obligations.” and that they have sometimes been delayed or made a mistake in their relations with the administration”.
In that goal of improving relationships, Fernández also announced the upcoming launch of an expense calculator. Specifically, citizens will be able to access their contribution to government expenditures based on their income through a tool that will be available on the website of the Tax and Customs Administration for spending contributions.
Source: La Verdad
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
