IMF: Overhaul of Spain’s taxation system critical

An overhaul of Spain’s taxation system, which the government is due to present next month, will be critical to achieve a lasting recovery after the economy turned the corner, the International Monetary Fund has said.

The government should increase indirect revenue and cut social-security contributions for companies hiring low-skilled workers, the Washington-based IMF said in the concluding statement of its Article IV mission to Spain.

The base of income tax should be broadened while corporate-tax rates could be cut gradually, it said.