Airef demands a “comprehensive reform” of Spanish tax rules and confirms that the State has only complied with them 41% of the time

The Independent Authority for Fiscal Responsibility (Airef) sees it necessary to reform the national fiscal rules that have been in force in Spain since 2013. The watchdog of public finances calls for a “comprehensive reform” of the regulations in the face of numerous “weaknesses” that have been confirmed since its launch more than ten years ago. An update that adapts them to the new European fiscal framework, in force since last year.

This is stated by the organization in an opinion made public this Monday. A clear example of this weakness that the fiscal supervisor warns of is the repeated breaches of tax rules which administrations have incurred in recent years. Spanish regulations require that administrations simultaneously comply with three numerical rules: the spending rule, the deficit rule and the debt rule.

Airef has analyzed the extent to which administrations have complied with the regulations and the results are striking. The central government has only met 41% of the fiscal milestones that have been in force between 2013 and 2019 and in 2024 (between 2020 and 2023 the fiscal rules were suspended). Specifically, it has only complied with the deficit limits once in this period, while it has exceeded the maximum expenditure allowed in three of the eight years analyzed.

Instead, The autonomous communities have achieved 61% of the fiscal objectives in the period analyzed by Airef. Of course, not a single one of the autonomies has complied with the three rules (spending, deficit and debt) simultaneously every year. In fact, regions such as Murcia or the Valencian Community – which are in a situation of underfinancing – have never met all three milestones at the same time.

The the most obedient administration is the local onewhich has met 87% of the fiscal objectives that have been set in recent years. This level of administration has less financial autonomy and depends more on the central State, so they also have less room to deviate.

The Airef estimates that if all administrations had strictly complied with the fiscal objectives that they have been setting, the country’s public debt would be 69% of GDP and not the 103.2% that is currently recorded. A figure that, rather than reflecting a scenario of what would have been a reasonable fiscal adjustment, shows its distance from reality. “Certainly, The objectives and adjustment required in many cases were not very credible.“said Cristina Herrero, president of the fiscal supervisor.