Finance minister announces increased tax receipts for early 2014

Finance Minister Cristóbal Montoro has announced a rise in tax receipts, which the government is keen to portray as further evidence of an incipient economic recovery.

Fiscal revenues for the first two months of the year grew nearly six percent, said Montoro at a business gathering in Madrid on Wednesday.

If this trend keeps up, it could mean additional revenues of nearly 10 billion euros by year’s end, although the Tax Agency is treating these figures with caution.

In his optimistic speech, Montoro also failed to mention the 2013 deficit, alleging he needs to inform Brussels about it before revealing more. He did say, however, that receipts for value-added tax (VAT) grew six percent in February.

Taxable income is being broadened and when that happens, it means the economy is improving”

“This represents the revenues of small- and medium-businesses and self-employed workers. Taxable income is being broadened and when that happens, it means the economy is improving,” he stated. “Nobody paid more taxes of their own volition.”

Montoro also revealed that these improved results could lead the government to push forward some of the measures included in the new tax system scheduled for introduction between 2015 and 2016. On Thursday, a committee of experts was scheduled to hand the government a report with suggestions for the fiscal reform. The group is led by Manuel Lagares, a university professor who headed the previous reform by the Popular Party (PP).

While the minister would not unveil any details of this reform, he did say that part of it entails lowering taxes “to improve the purchasing capacity of the lowest earners.”

Montoro also believes that these improved results provide Spain with some leverage to ask Brussels for something in return. That is why he has asked the European Commission to return a billion euros that Spain had to contribute last year to complete the budget for the European institutions.