Mònica Roca considers the Government reform excessive and urges it to give special treatment to the self-employed, more similar to the European average
Two out of three self-employed workers would pay less with the ‘Escrivá reform’ and the rest would pay much more than now
The Ministry of Social Security and the organizations of freelancers They have resumed negotiations to try to agree on the new reform of the contribution system for self-employed workers. The will of the ‘Escriva reform‘ is to put an end to the Spanish anomaly, where the self-employed contribute based on the quota they choose – the vast majority choose the minimum – and not based on the income they obtain. And the objective of the Government is to progressively equate their contributions and rights to those of employees. A goal that, according to calculations made by the Barcelona Chamber of Commercewould require increasing the monthly fee paid by each self-employed person by 70%, going from the current average of 304 euros to 515.6 euros.
From the entity chaired by Monica Roca They have provided a report this Wednesday in which they ask the Government to rule out equating one group to another due to the intense increase in the tax burden that this would imply. And they advocate special treatment for self-employed workers, more similar to the models of the main European economies and with different models for self-employed entrepreneurs, registered professionals and individual workers. Which, de facto, would imply paying more taxes and contributions than now, but less than what they consider the group as a whole will pay after the ‘Escrivá reform’.
The special regime for self-employed workers (CHALLENGE) is currently a source of deficit for Social Security. The Chamber’s report, prepared on the basis of data from the Tax agency, points out that each self-employed person contributes an average of 3,652.4 euros per year to Social Security and consumes an average of 5,946 euros per year. That is, it generates a deficit of 2,294.1 euros per year, more than double that of a wage earner. “The current system is not very sustainable in financial terms in the medium and long term,” says the business organization in its report.
Increase the load, but not much
From the Chamber they advocate increasing the tax burden of the self-employed, but that this does not exceed – between fees and personal income tax – 18% of their net income (income minus expenses). According to his calculations, currently a self-employed natural person contributes 28% of their income, divided between a low fee -the vast majority choose to pay the minimum- and an income tax more coupled to their turnover. While the Escrivá reform, under the terms of the latest proposal, would raise the average contribution to 43% of the total net income generated by a self-employed person. That is to say, once the expenses of the business have been subtracted, from the 100 euros generated, 43 are kept by the State, between the quota and the IRPF.
This calculation has a wide bias, since it is established on an average and the Government reform is characterized by polarizing the contribution. That is, those who enter the least will not contribute 43% of their returns, but substantially less. And those who invoice the most will be the ones that would come closest to those tax contribution levels.
“We do not agree with the Government’s proposal to reform the RETA. Yes, it is true that we are at prices below what would be necessary, but the increase that is proposed is exaggerated & rdquor ;, declared the president of the Chamber, Nuria Roca. In this sense, the Chamber agrees with ATA -the association linked to the CEOE- and with Pimec, who have been against the magnitude of the changes that Escrivá intends. The latest proposal that the Executive has sent to the social agents -and which will be subject to substantial changes in its next version- is based on 13 income brackets, where each self-employed person will pay a fee based on how much they invoice (and how much can be deducted later ).
What effects will the ‘Escrivá reform’ have?
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Here the calculations of the Chamber coincide with those of Escrivá: two out of three self-employed workers will pay less with the new system. In other words, those who now earn 1,300 euros or less per month would pay less after the reform. Specifically, this would mean an average saving of 800 euros per year. And the remaining third would pay more, specifically about 6,000 euros more a year on average. Which for the Social Security coffers would translate into about 4,600 million euros more in collection per year.
The Chamber considers that this increase in tax pressure on part of the group will generate inequity, since they will be required to contribute as employees but without the same rights. And it will be a brake for the self-employed group, generating the risk that the underground economy will increase, part of the group will be discharged. Some because they will look for work for others and others, those who invoice more, will stop being self-employed to set up a commercial company and thus have a lower tax rate than the one promised by the new system.