The Minister of Inclusion, Social Security and Migration, José Luis Escribáis, seeks to alleviate the bleeding of Social Security deficit. Although the main proposal on the expenditure side was to bring the effective retirement age closer to the real age, on the income side, the aim was simply to raise more. And in that effort to collect, the self-employed would be the most affected group.
Unlike the workers, the self-employed can choose their contribution according to the regulatory base, located between 944.40 euros and 4,070.10 euros. However, this basic freedom of choice is restricted after the age of 47 and it is only possible to increase it progressively according to the limits established each year.
That freedom seeks to be suppressed So what the performance of the activity generated is equal to the salary and is linked to the contributions.
In the current situation, the minimum fee for the self-employed is 286.15 euros per month for a contribution base of 944.40 euros per month, obviously this does not take into account whether the flat rate is in place. And that is the preferred choice for the majority of the group, trying to contribute by the minimum base, although this means a lower estimated pension of 37% below the General Scheme.
If our pension system is so positive, it is striking that when offering freedom to choose, we seek to participate as little as possible in the pay-as-you-go system. Y that freedom is what the government wants to attack.
To attack the self-employed It seeks to equate the net salary of an employed person with the net return of the activity of the self-employed. And this is the point of conflict since its comparison is absurd.
It is defined as the net return on the activity the income generated by the self-employed versus the costs related to the activity.
From the point of view of income, the net salary integrates a certainty for its calculation both in the amount and at the moment in time. Conversely, Self-employed billing is volatile over time and faces the problem of delinquency. It would be very detrimental to have a fixed cost system with volatile income for the sustainability of any business. Consequently, it does not make the least sense that it is treated in the same way as wages for others.
Continuing with the problem around billing, it must be taken into account that there are multiple activities with a clearly seasonal component, which is why revenues are highly weighted in certain months of the year. Many freelancers are not registered twelve months of the year. In this case, it would not be clear what would be the system to determine the amount to contribute to social contributions.
Adding to the problem of income imprecision is the fact that binding costs are tremendously relative and there is no clear criterion. Many times the self-employed person is faced with the situation of doubting whether an expense is deductible for part of the activity and whether it will be accepted by the Treasury.
A net salary goes directly to fully cover the amount of family expenses, but the net return of an activity does not. We find that they exist a series of expenses necessary for the activity that are not 100% deductible and that have a direct impact on that net return.
To make matters worse, there is a problem of practical execution after the valuation. The self-employed respond to the Treasury in the middle of the fiscal year of the following year. It is at this point that the State knows what the net income generated by the self-employed is.
Next, to determine the price, the Administration should wait for the next financial year. So we would find ourselves before the paradox that the contributions to be paid would refer to the net income generated two years ago and that given the volatility of any business it may not reflect the reality of the present.
This measure simply seeks to continue drowning, more if possible, the self-employed, as if the crisis suffered by the restrictions caused by the pandemic were not enough. If the government continues in this way, many freelancers will choose to introduce part of their turnover in the black economy so as not to be affected. An assumable fiscal risk if the alternative is to disappear and, by the State, a loss of taxation of personal income tax and VAT.