The interest that the environment and environmental protection measures are currently generating from the scientific, social and political angles is clear; focusing on the non-fiscal aim of environmental taxes, they should be looked upon as a tool designed to reduce or eradicate polluting behaviour.
The key international institutions – the IMF, the OECD and the EU – take the view that the extent to which these taxes have been developed is insufficient, since the revenues they generate fall well short of the average levels of our neighbouring countries; indirect taxes of an environmental nature therefore need to be increased, going so far as to implement a so-called “Green tax reform”, which would entail replacing part of the tax on earned income and social security contributions with higher environmental taxes payable.
For a full understanding of the environmental tax model in Spain, we need to bear in mind that a major part of such model is made up of taxes approved by the Autonomous Communities which, owing to the reduced implication of the State, have found in them an ideal means of exercising their fiscal power. This makes this question even more relevant in the current circumstances, bearing in mind that the review of the autonomous community and local financing model is viewed within political circles as a clear priority which needs to be addressed in the near future.
There are therefore more than sufficient reasons explaining the decision of the Foundation’s Board of Trustees to back this project, which has involved, along with experts from academia, professionals from all the firms of which the Board is made up. Furthermore, two round tables have taken place, with participants including senior level representatives of the Directorate General of Taxation of the Ministry of the Treasury and of the Climate Change Office pertaining to Ministry of Agriculture and the Environment, the Directorates General of Taxation of several Autonomous Communities, and other experts in the area, whose opinions have been extremely valuable.
Among this extensive list of collaborators, particular mention should be made of the work of Pablo Renieblas (Deloitte) and Pedro González-Gaggero (EY) as coordinators, and the considerable expertise of professor Herrera Molina (UNED), who has a great deal of experience in this area, having formed part of the Committee of Experts put together to study the 2014 tax reform.
The fruit of this work is the book which the Foundation has published in June 2018, which addresses a broad range of technical issues relating to the different taxes currently in existence and the innovations which could be introduced, along with specific proposals by the authors. On the other hand, there is a focus on reflections of a more general nature, regarding the criteria which should be adopted in the tax reform being studied, which seek to reconcile environmental objectives with a well-designed tax policy. This should include the gathering of information and assessment of the impact of new taxes or increases in existing taxes on different business sectors and consumer habits, the implementation of changes through an appropriate legislative technique which guarantees the environmental purpose of the taxes, the combining of tax measures with other measures of various types depending on the circumstances in each case, and the introduction of changes with appropriate measures in place for moderation of the impact in sectoral and temporal terms, so as to avoid the creation of a complex system with too many taxes which increase the indirect tax burden and aim for adequate harmonization or coordination between the different autonomous community taxes, with the State and the Autonomous Communities taking a cooperative approach favourable to the general interest.
The analysis offered focuses on the three areas into which the Project is divided up (with a total of 12 chapters), namely:
- Reflections of a general nature on environmental taxes.
- Taxation of the different sources of environmental impact, in Spain and in Comparative Law.
- Assessment of the current situation of environmental taxation in Spain and recommendations on how to improve it.
The intention of the Foundation’s Board of Trustees, and of the authors, is that this Project and the book which has resulted from it, should provide the various social partners who are to play a role in the study and eventual approval of the pending reform with a useful working tool over the coming months. The reform undertaken will need to be one of considerable importance, for environmental protection policy in Spain and in terms of the basic structure of the Spanish tax system, with a possible redefinition of the balance between its different taxes and the distribution of competences between territorial bodies at different levels.
This work has been developed with the collaboration of Gas Natural Fenosa and REPSOL.
NOTE: In order to correct an omission made during the publication of this paper, Alberto Artamendi Gutiérrez is expressly included among the authors of the paper prepared by Uría Menéndez, “Taxation of Energy and Energy Products”.