As a result of several months of work, in October 2024 Fundación Impuestos y Competitividad published its first work dedicated exclusively to the study of the local tax system.
The book does not analyse the issue of local authority financing, focusing on specific tax problems, as a field of the Foundation’s research work. In this context, and with the usual philosophy underlying other projects, there is a broad analysis of the subject, which in no event aims to be all-encompassing, with a diagnosis of possible problems and proposals for solutions
As the title of the work bears out, the authors generally agree on the need for a deep reform of the current system, characterised by its age and certain significant defects that the legislator has been ignoring. A clear example of this attitude is the recent process in relation to the “municipal capital gains tax”, where several Constitutional Court judgments have been necessary to trigger a late reaction on the part of the legislator, with a serious deterioration in legal certainty for the taxpayer, and an adverse impact on the Municipalities.
Fundación Impuestos y Competitividad now makes the full text of the book freely available to anyone interested, its contents having been posted on this website and presented in a couple of sessions organised in recent months and open to the general public.
In this “presentation” of the book, it seems appropriate to outline its structure and contents.
Its eleven chapters are structured in two parts; the first part looks at the municipal tax system as a whole and, together with the first chapter which provides a general overview, analyses what are considered to be its main problems:
- use of objective assessment in determining tax bases and tax rates; compliance with the principle of economic capacity;
- dual management, which triggers complexity and legal uncertainty; and
- difficulties in accessing dispute settlement mechanisms and legal protection.
The second part, which includes chapters V to X, deals specifically with the main taxes in the system, specifically, the taxes on Real Estate, Economic Activities, Construction, Installations and Works, Increases in the Value of Urban Land, Motor Vehicles and, finally, Municipal Taxes.
Chapter XI, following the formula reiterated in other works of the Foundation, contains the General Conclusions, in an effort to consolidate the specific developments of the other chapters.
The legislator should become aware of the need for the aforementioned reform in the near future, bearing in mind that it would be advisable not only for taxpayers, but also for all parties involved in the application of the Local Tax System, and especially, the Local Authorities themselves.