The underground economy accounts for between 20-25% of Spain's GDP. Meanwhile, the nation?s tax system is scrambling to increase revenue. The Tribunal de Cuentas, the national tax court, is making matters worse. Even if a lot of tax revenue is lost to the underground economy, only 17% of the fines charged to people convicted of fraud have been paid.
That shows that the Agencia Tributaria, Spain's national tax service, is inefficient and lacks the physical and human resources that it needs and is struggling to integrate with regional and municipal tax agencies. Montoro should respond to this issue within broader tax reforms. Because the battle against fraud demands coordination and resources. Everything else is words in the wind.