One of the most comical situations this week has been the meeting of two presenters who are the paradigm of manipulation and entanglement: Pablo Motos invited Sonsoles Ónega to present her new book on El hormiguero. During the conversation, Motos asked her about the VAT on books and she complained that it was 21%, considering that if it were lower she would sell more books and people would read more. Both presenters criticized that the VAT on books was the same as that on cigarette packs. “The VAT on books should not exist if you want a cultured country”, said Motos, and they hinted at the possibility of campaigning for the government to reduce it, pointing to Pedro Sánchez as responsible. “What happens is that the president of the government is in China, but well, he will get there eventually...”, said the ant tamer.Neither Motos nor Ónega knew that, in reality, the VAT on books is 4%, and the next day both had to correct themselves on their programs. Motos corrected himself hastily, blaming the guest: “Sonsoles Ónega proposed to the team that we talk about the VAT on books. We said yes and nobody checked the data”. That this slip-up with the VAT on books happened in the context of Atresmedia is very significant, considering that the group has Grupo Planeta as its main shareholder, one of the major players in the publishing industry. It must have caused internal tensions that, within the same business ecosystem, such a basic error about the sector has been spread. It highlights the lack of knowledge of the cultural industry within the same conglomerate. Ónega, affected, was undergoing therapy with psychologist Rafael Santandreu, taking advantage of having him as a guest: “I beat myself up. I’ve been anxious all day, Dr. Santandreu, for not having confirmed the data. I apologize. I did it without any intention of misinforming or manipulating”, she assured. And she asked the “doc” for advice on how to overcome the ordeal. Santandreu consoled her with the argument that he had sold more than a million books and also did not know the percentage of the tax. He reassured her with his usual fallacies: that to not worry, he only had to want to do so and that one mistake cannot overshadow all the good you can do. Using his simplistic explanations, he appealed to the “virus of terribilitis” as a mechanism to overstate concerns. Ónega thanked him for the good advice and moved on to more consultations for the “doc”.The chain of blunders is fascinating. They are wrong about the VAT on books in a company mostly owned by one of the major publishing groups. Ónega, to get over the upset, was having therapy, calling "doctor" a guest who is neither a doctor nor has a doctorate in anything. And the psychologist, instead of denying it, legitimized his authority by appealing to the sale of more than a million books. Luckily, the presenters called for "a more cultured country."

Sometimes, a good social response is not a good political response. Lowering VAT on fuels is one of the most common responses –and best received by citizens– when the cost of living rises, as we are experiencing due to the outbreak of the war in Iran. Its effect is immediate and visible and, for this very reason, it often becomes one of the options taken by governments. However, as Brussels has warned, which has questioned Sánchez's reduction, not only its legality but also its effects must be called into question. To what extent have these types of measures become an almost automatic response to episodes of inflation without taking into account their costs and benefits, compared to other less conspicuous, but perhaps more effective, political alternatives?It is not difficult to understand why VAT reductions are attractive. In a context like the current one, marked by rising fuel prices, reducing VAT translates directly into a lower price at the petrol station. It is an easy-to-explain measure, which reaches everyone and is immediately perceived, making it particularly tempting for governments. But this same simplicity is also its limit: not all households benefit equally, and they often end up benefiting those who consume the most. Furthermore, by artificially lowering the price, the measures reduce the incentives to adjust consumption in a context where energy prices remain high and with no clear prospects of reduction., the measures reduce the incentives to adjust consumption in a context where energy prices remain high and with no clear prospects of reduction.They are not, therefore, isolated cases. Our tax system has been accumulating a set of benefits – reduced and super-reduced VAT rates, deductions and exemptions – which, far from forming a coherent system, reduce its revenue and the system's redistributive capacity. They are mechanisms that reach many but often redistribute little, and that end up functioning more as generalized discounts than as instruments of social policy. In this context, there is growing consensus on the need to review these tax benefits and strengthen more direct and better-oriented instruments.The problem is not the lack of instruments, but how we use them. We prioritize visible measures that help diffusely, while the most effective ones often do not arrive. The challenge is not to add more aid, but to ensure that those that work are the ones that are applied. Whether they are popular or not.

The European Commission has warned Spain that reducing VAT on fuels to 10%, as the government of Pedro Sánchez has done in the decree to alleviate the impact of the war in Iran on households, violates European rules. This was communicated in a letter sent to the Spanish government at the end of March, according to sources from the European executive told El País. "It is important to point out that the EU VAT directive does not provide for the possibility of applying a reduced rate to fuel supplies," the Commission explains, according to the Madrid newspaper. Poland, another country that has opted for the same path as Spain, has also received a similar letter.

The State closed 2025 with the lowest public deficit since the outbreak of the financial crisis of 2008, thanks to a new historic record in tax collection, as reported this Tuesday by the Ministry of Finance.

Politics shouldn't be all about pronouncements and grand gestures. Pragmatism is also essential. In short, it's about being practical so that citizens, those governed, feel they aren't being abandoned when times get tough. And this seems to be the path the Spanish government has taken with the package of measures designed to mitigate the effects of the war in the Middle East. The conflict, whose end appears far off, has driven up gas and oil prices and, consequently, the prices of everything related to them, such as fuel and electricity. That's why the measures announced by Pedro Sánchez will amount to around 5 billion euros, far less than the more than 20 billion mobilized in 2022 following the invasion of Ukraine—but we are still in the early stages and don't know how long the war might last. The first decree focuses on reducing energy taxes, one of the services most affected by the impact of the Middle East crisis, and one that could have ripple effects throughout the economy. In addition to lowering the VAT on electricity and gas from the current 21% to 10%, as well as on biomass raw materials such as pellets and firewood, the energy production tax, currently at 7%, is temporarily eliminated and reduced from 5.5% to a special rate of 0.5%. Maximum retail prices for butane and propane are also frozen. The VAT on gasoline and diesel is also reduced, which, according to the Prime Minister's office, will result in a savings of approximately 30 cents per liter when filling up. Consumer organizations estimate that the reduction will be around 17 cents for diesel, which has seen the largest price increase. A key point, also included in the decree, is granting the National Commission for Markets and Competition (CNMC) new supervisory and sanctioning powers to prevent operators from exploiting the tax cut to increase their profit margins and enrich themselves. This is essential to prevent the tax reduction from benefiting certain companies more than citizens and, therefore, taxpayers.

Visibly pleased with the regional financing proposal presented by Spanish Vice President María Jesús Montero, but aware that it's impossible to obtain 100% of what they want, the Catalan Minister of Economy, Alícia Romero (Caldes d'Estrac, 1976), received ARA at the Palau de la Generalitat, convinced that Catalonia will succeed. She also stated that she doesn't see it as impossible for the proposal to go ahead.

There is one driving force preventing the Spanish government's ability to manage from grinding to a halt: tax revenue. Through November, tax collections have exceeded €300 billion for the first time. This unprecedented level, achieved just one month before the end of the fiscal year, suggests that 2025 will be another record-breaking year for revenue.

Last week we read that Inflation returned to 2.9% due to rising energy prices. Without a doubt, the price of electricity and fuel are the main factors driving up prices in the domestic economy, as they not only affect family pockets but also the costs - and therefore the prices - of companies. But have you ever stopped to think about what we pay for on our electricity bill?

European Union finance ministers today agreed on a reform of value-added tax (VAT) rules that will give governments more flexibility to apply reduced tax, exclude environmentally harmful products and allow other products considered essential to be added. The reform has needed three years of "marathon" negotiations, in EU Commissioner for the Economy Paolo Gentiloni's words, who recalled that proposal was initially made in 2018 and negotiations have dragged on until today.

The Spanish government says it has given autonomous regions economic oxygen after the Fiscal and Financial Policy Council (FFPC) met on Wednesday. The Ministry of Finance has informed regions they will receive €112.2bn in advance funding for 2022, a 6.3% increase on the previous year. Of this amount, ARA has learnt, Catalonia will receive €21bn, an 6.8% increase on 2021.

Sixteen months and a pandemic later, the new rules of the game are about to be activated. From Thursday, 1st July, e-commerce businesses selling to other EU countries will be taxed according to new criteria. Brussels is thus approaching a twofold objective: to become a real single market and to shield itself against fraud and competition problems generated by large foreign platforms. But what does this change mean, in practice, for small entrepreneurs?