Escrivá’s plan for the self-employed raises the maximum annual fee in nine years from 4,200 to 15,200 euros

Ivie researchers warn of the inequities of the new model and propose using tax returns as a contribution base but a single rate for all.

The General College of Economists described this week as “unfeasible” the reform proposal made by the Government for the Social Security contribution system. This criticism has also been added from the academic world through an analytical document prepared by researchers from the Valencian Institute of Economic Research (Ivie). In this document, they warn that the new contribution model devised by the Minister of Inclusion, Social Security and Migration, José Luis Escrivá, has “significant equity deficiencies.”

Moreover, according to his analysis, these inequities are recorded in different areas: within the self-employed regime itself, between those who earn the most and those who earn the least; regarding the General Scheme for wage earners”; and, especially, these deficiencies increase in the transitory system of implantation between 2023 and 2031.

The first inequity raised by these experts arises from the fact of abandoning the choice of the contribution base and going on to contribute for the fiscally declared tax yields. But, in addition, the fee to be paid will be set based on a series of yield brackets, instead of being the result of applying the same single rate to the contribution base, as was the case until now. This means that “not all affiliates are going to be subject to the same type of contribution, which implies a bankruptcy with respect to what happened until now in the Special Scheme for Self-Employed (RETA) and in the General Scheme for salaried workers”, indicate the Ivie researchers. With this, they add, an inequity is generated.

As they warn, the different variations of quotas do not seem to follow any “reasonable” pattern. If the installments that will be paid in 2023 are compared with those that will be paid in 2031, some, such as those with the lowest incomes (less than 600 euros per month), will drop by 35%, while those that will pay the maximum installment will be increased by nearly of 250%. Specifically, these “implicit” rates in future installments are very different depending on the volume of returns.

The economists who have prepared the Ivie document on the new rate for the Self-Employed Regime – Enrique Devesa, Mar Devesa, Borja Ecinas, Inmaculada Domínguez, Miguel Ángel García and Robert Menu – point out that the rate for tax returns, despite being more equitable than the current one, “will increase the complexity of management”.

His argument is that the payments will depend, on the one hand, on the data that the self-employed themselves provide to the Tax Agency; and, on the other hand, the fact that the tax yield bracket can be changed up to six times a year. To this must be added an annual regularization that must be made to pay or receive the difference between what was quoted and what they should have contributed.

In conclusion, these economists make an alternative proposal: use tax returns as a contribution base but continue to apply a single rate for all self-employed workers (and that this is similar to that of salaried workers).