Dividend system lacks tax monitoring

Last year 14% of companies listed on the Ibex paid shareholder dividends in stocks. In 2012, 33% of them paid in stocks. Of the more than 25 billion euros paid out to shareholders, 8.216 billion were paid through stock shares, reducing the amount of cash that companies have to come up with.

This system creates serious problems for Spain's tax agency, because the calculations are difficult and because numbers can be fudged easily. This travesty of a tax control method is an example of how the Ministry of Finance, instead of focusing their efforts on the increasingly challenging fight against tax fraud, is resorting to charging higher tax rates and creating new taxes in order to boost revenues. While this strategy is easier, but less efficient.