Government tax revenues are slowing signs of stagnation once again. Even VAT revenues are slowing down, even though they are growing slightly. The Tax Agency has indicated that consumer spending on products and services that are taxed with the VAT fell 10% in Q1 2013.
Meanwhile, personal income tax revenues continue to fall. They were down 5.2% last quarter. A 2.38% deficit in the national budget shows that Spain is suffering from another imbalance between revenues and spending.
The problem will not be solved so long as the government does not stand up to the challenge and carry out a tax reform that lowers tax rates and widens the tax base to include more people.
