Trying to get the self-employed to contribute according to their real income, instead of being able to choose how much they contribute to Social Security (something that neither an employee nor their employer can do) has been a recurring aspiration by different governments for years. The socialists tried it, with Octavio Granados at the head of Social Security and also the popular ones, with Tomás Burgos in that same position. The high heterogeneity of self-employed workers and the difficulties in locating each one according to what they earn made those who tried to implement this system throw in the towel.
Now, the Minister of Inclusion, Social Security and Migration, José Luis Escrivá, is convinced that he will be able to make the self-employed contribute according to their income and, in addition, he has promised Brussels to make this change. Although it is still early to know if he will be able to carry out this reform with the agreement of those affected or alone. If he does not get that support, defending the reform (as a bill) in Parliament will be much more difficult.
That said, the negotiations with the associations of this group are again highlighting the difficulty of separating the wheat from the chaff and classifying the group by its net returns.
Thus, Escrivá’s team has modified up to three times the calculation of how the self-employed are distributed according to their earnings, since the data crosses between Social Security and the Tax Agency reflect the difficulty of making a uniform X-ray. Thus, for example, the latest crossed data provided by the Government to the self-employed indicate that 63% of the self-employed would have a real income below the minimum interprofessional salary (SMI) –13,512 euros per year– while the remaining 37% would be below above.
Although, that 63% with lower income would be made up of 46% of the total self-employed who declare to be below 600 euros per month (7,200 euros per year); 10.7% would be in a range of 600 to 900 euros and another 7% would be in the range between 900 and 965 euros, which was the minimum wage until now.
This does not mean that half of the self-employed earn less than 600 euros, but rather that this group with the lowest income includes, for example, 25% of self-employed workers with negative and zero income, due to the peculiarities of corporate self-employed workers (those owners of companies that are not natural persons) or the category of collaborating family member. And the companies are more likely to deduct expenses than the rest.
To this must be added the differences in the information available to Social Security and the Treasury, since the former have 1.5 million registered self-employed companies, while the Tax Agency has only 800, because they would not include community property, nor labor companies, for example. On the contrary, the Social Security does not have registered some 255,000 non-regular self-employed or members of mutual societies.
These difficulties are what have led the ATA association, included in CEOE, to transfer to Social Security, from the first moments of the negotiation, that “with current data it is impossible to determine the real economic capacity of the vast majority of self-employed” And they add that, therefore, “the protection cannot be determined by the ability to deduct the expense of the self-employed”, they denounce.
ATA Alternative Proposal
For this reason, and before moving to a system of yields by tranches such as the one proposed by Escrivá, at ATA they are betting that in the next five or six years the system “will be reordered” “with more reliable information from the Tax Agency (modules, corporate, family collaborators, self-employed in losses)”.
Meanwhile, and before opting for a system of brackets linked to income, this association has proposed to the Government a progressive increase in the minimum base of the RETA up to the minimum interprofessional salary (minimum base of the General Regime) and that it be accompanied by the future annual increases in this salary until 2028. In this way, the minimum base would rise by around 30% until that year and would lead to an increase in annual collection of 3,600 million euros. will inequity and injustice in the systems
Given the difficulty in detecting the net income of the self-employed and while the system is being reorganized, the main self-employed association ATA has proposed to the Government that before opting for a system of sections linked to income, they apply a progressive increase in the minimum base of the Special Scheme for Self-Employed Social Security Workers (RETA) up to the minimum interprofessional salary (minimum base of the General Scheme) and that it be accompanied by future annual increases in this salary until 2028. In this way, the minimum base would rise by around one 30% until that year and would lead to an increase in annual revenue of 3,600 million euros from 2028.
They also propose two other tools to increase the contribution of the group: eliminate the caps on the bases for those over 47 years of age and that companies can deduct the share of Corporation tax.
Uatae petition to the INE
Also from the self-employed organization Uatae, linked to CC OO, they implicitly recognize that there is a lack of reliable data to make a map of self-employed income with which to design a new contribution system and, for this reason, they have today asked the National Institute of Statistics (INE) that, just as it publishes an annual survey of the salary structure of employees, also analyzes the economic situation of the self-employed, a group that exceeds 3.3 million workers.
“Crucial issues such as the gender gap between self-employed and self-employed in pay matters do not officially exist, because the administration ignores them,” the general secretary of Uatae, María José Landaburu, denounced in a statement. For this reason, she has asked the president of the INE, Juan Ramón Rodríguez Poo, “to undertake to correct this incomprehensible grievance”
“The INE is an institution of enormous prestige that provides a reliable service to Spanish society with its different surveys and studies, which are useful to act, for example, on gender discrimination, and for this reason it must also reach self-employment “, says the statement.
Uatae recognizes that by not receiving a salary and having a very diverse income compensation system, it may be more complex to compose a global vision of the self-employed group, but remember that the data is in the hands of the Treasury.
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