Self-employed workers cross their fingers as government 'considers' percentage-based Social Security fees
Thursday, January 23, 2014 @ 9:46 AM
SPAIN'S government is considering overhauling the Social Security system for the self-employed after years of complaints by sole traders and small business owners that they are being bankrupted by financial demands from the State.
In what could be a landmark reform that would provide a much-needed boost to business for those working for themselves, the PP may be considering the possibility of the self-employed paying monthly Social Security (National Insurance) contributions according to what they earn, rather than a flat rate.
Although the government insists it has no immediate plans, after a meeting between vice-president Soraya Sáenz de Santamaría and a national association representing self-employed workers, the latter claims the cabinet has promised to investigate the situation in depth and consider a radical reform.
The association presented a revised system whereby each person who works for him or herself pays according to their 'actual financial capacity', which would drastically reduce Social Security and income tax for those with low earnings and considerably increase them for those who are capable of paying more.
This way, the association told Sáenz de Santamaría, the Social Security authorities would in fact claw back more, rather than less money and smaller entities and sole traders would have a chance to grow, invest in their businesses and possibly take on more staff.
At the moment, as the vice-president revealed, the Social Security office accumulates an annual debt exceeding 10 billion euros, and has just seen a loss of 900 million in a year when it expects to have to pay double the number of retirement pensions out of the pot.
Read more at thinkSPAIN.com