Oireachtas Joint and Select Committees

Tuesday, 6 December 2016

Committee on Budgetary Oversight

EU Directorate-General Economic and Financial Affairs: Discussion

5:00 pm

Mr. Carlos Martínez Mongay:

We are not saying that all the increases recorded in tax revenues are exceptional. We refer to the fact that tax revenues in some cases are growing exceptionally because part of the tax bases which are not very stable are growing exceptionally. We must distinguish between permanent increases in taxes, cyclical increases in taxes and exceptional increases in taxes. This implies a very detailed and rigorous analysis of the developments in the tax bases and tax rates and, therefore, the ability in this case to identify which taxes or which tax bases are more volatile. The more volatile tax bases are associated with the production of the most volatile tax revenues. As a result, some of them can be exceptional. Our recommendation is, once these exceptional revenues have been identified, to allocate in order to reduce the deficit and, therefore, the debt.

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