The director of Mediodía COPE, Pilar García de la Granja, claims that Spain has Finnish taxes with much lower salaries. Almost 70% of the resident population does not pay income tax, which increases the fiscal effort for those who do.
The Spanish tax structure creates a paradox that directly affects taxpayers' wallets. According to economic expert Pilar García de la Granja on COPE's 'La Linterna' programme, "we have Finnish taxes, but with salaries that are not Finnish." The key lies in the fact that millions of people are exempt from paying income tax, which concentrates revenue among a small group of taxpayers.
70% of the Population Does Not Pay Income Tax
Official data from the Tax Agency reveals that practically 70% of the total resident population in Spain does not effectively pay income tax. If we narrow the focus to those who file a tax return (between 22 and 23 million people), nearly 40% do not generate a positive tax liability, meaning they receive a refund or have a zero balance. This is because salaries below the Minimum Interprofessional Wage (around €15,876 annually), unemployed individuals receiving minimum benefits, and a high percentage of pensioners are exempt.
As a consequence, the actual revenue from income tax is heavily concentrated on middle-high and high incomes, which face a greater burden. García de la Granja explained that "there are millions of people in Spain exempt from paying income tax; therefore, those of us who pay taxes pay well above the average."
We have Finnish taxes, but with salaries that are not Finnish
This high pressure on a segment of the population has direct effects on the economy, such as the increase in the informal economy. According to the communicator, this problem "had been effectively tackled" but "has surged again" due to high taxes.
Fiscal Effort: Spain vs. Finland
The debate arises from a report by the Valencian Institute of Economic Research which reveals that Spain continues to lose fiscal competitiveness. The study indicates that the tax burden borne by Spaniards is 14% higher than the EU average in relation to their economic capacity. García de la Granja distinguishes between tax pressure (total revenue divided by the population), where Spain would be below average, and the fiscal effort, which is where the problem lies.
When comparing Spain to Finland, the complaint makes complete sense. Although the overall tax pressure in Spain (37.3% of GDP) is lower than in Finland (42.2%), the difference in salaries is staggering. The average annual salary in Spain is around €32,587, while in the Nordic country it approaches €53,310. The tax wedge, which measures the weight of taxes and contributions on salary, is 40.7% in Spain compared to 43.9% in Finland.
Nominally, a Finnish worker pays a slightly higher percentage of their salary to the state. However, the concept of fiscal effort measures tax pressure in relation to available wealth. Since salaries in Spain are substantially lower, losing 40% of gross income "hurts" economically much more than losing 43% in Finland, where the remaining purchasing power is significantly higher.
Work Absenteeism, Another Burden on the Economy
The same report from the Valencian Institute of Economic Research places Spain as the European country with the highest rate of work absenteeism. A 4.5% of Spanish employees did not attend work in the reference week due to medical leave, a rate that has increased by almost two points since 2018. In fact, in 2024, Spain was the country with the highest percentage of workers on leave in the entire European Union after climbing five places in the ranking.
For the average taxpayer who does pay income tax, this situation translates into a higher tax bill and a sense of inequity. The economic expert recommends reviewing the tax structure to broaden the taxpayer base and reduce the effective rate on middle incomes. Meanwhile, the debate on fiscal competitiveness and fiscal effort will remain at the centre of the economic agenda.
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