Andorra PS Demands Tax Exemption Transparency Over Uneven Burdens

The Social Democratic Party (PS) parliamentary group has urged a review of Andorra's tax exemptions, deductions, and special regimes, citing 2024 fiscal data that shows taxpayers with similar economic capacity facing different burdens based on income type.

Government-provided figures analyzed by the PS reveal disparities in how income from work, business activity, or investments is taxed. Salaries, professional fees, self-employment income, and profits from many small and medium-sized enterprises are taxed on gross amounts, while certain capital gains and asset structures benefit from exemptions, deductions, or regimes that lower the taxable base.

Personal income tax (IRPF) revenue remains heavily reliant on a small group of high earners, with the top 10% of declarants contributing a substantial share. The PS questions whether this setup fairly distributes the fiscal load. Group president Susanna Vela asked if it is reasonable for labour, entrepreneurship, or economic activity to carry a proportionally heavier burden than some capital income. "The data show we have a pending debate on sharing this effort," she said.

The party extended its analysis to corporate tax, noting that declared profits often differ from the final taxable base due to deductions, exemptions, compensation mechanisms, and other tools. While acknowledging their potential justifications—like preventing double taxation or aiding key sectors—the PS called for details on their cost to public finances and beneficiaries.

The group stressed it is not seeking broad tax hikes or undermining Andorra's competitive low-tax model. Instead, it wants audits of major provisions and better data on effective tax rates by income type to ensure proportional contributions. "The debate is not about high or low taxes in Andorra, but whether everyone contributes equitably within a low-tax framework according to their capacity," Vela said. "It's not necessarily about paying more, but distributing the effort better," she added.