The consumer sector rejects a new tax increase

In a joint press release, companies in the consumer sector have come out against a further tax hike, warning that a possible new tax on VAT or excise duty on the activity or certain consumer goods would directly affect the citizen, causing a notable decline in consumption.

The sectors of the agri-food value chain (primary sector, industry, and distribution), as well as hospitality, have expressed concern about a possible new tax increase on certain consumer goods, such as excise duties, which would directly affect the citizen and would withdraw consumption.

The decline in consumption would also result in an upward reclassification of VAT or taxes that specifically tax the activity of the sector

Current data show that the recent increase in GDP and employment in our country is due to the driving effect of the upswing in household consumption.

These sectors reached, according to the INE, a production in the year 2015 of 480,000 million euros, contributing in an aggregate form to the economy an added value of 220,000 million euros, which represents more than 20% of GDP, giving employment to 5.7 million people, representing almost 30% of the total national employment. These are, therefore, highly strategic sectors for our country.

As has been shown on other occasions, an increase in the tax burden on consumer goods is very negative in the level of income and purchasing power of the citizen, as well as in the tourist sector

The value chain considers that in these moments of economic recovery it is essential to maintain the “status quo” of the taxes on consumption. On the other hand, a more determined fight against tax fraud and the underground economy (in Spain accounts for more than 18% of GDP), as well as the control of public expenditure, are measures that will increase efficiency and competitiveness, not only of our sectors, but of the entire economy as a whole.

A tax hike focused on VAT and excise taxes only penalizes domestic economies and contract demand, with the consequent impact on employment and business activity

For companies in the sector, increasing the tax burden on consumption means penalizing one of the most competitive and strategic activities of the economy, driving wealth, employment and welfare.