Andorra PS Demands Tax Exemption Transparency Over Uneven Burdens

The Social Democratic Party (PS) parliamentary group is urging a review of Andorra's tax exemptions, deductions, and special regimes, citing 2024 fiscal data that reveals uneven burdens among taxpayers with similar economic capacity.

According to the group's analysis of government-provided figures, personal income tax (IRPF) revenue is heavily concentrated, with the top 10% of highest earners contributing a substantial share. Salaries, professional fees, self-employment income, and profits from small and medium-sized enterprises are typically taxed on gross amounts, while some capital income and asset structures benefit from exemptions, deductions, or special rules that lower the taxable base.

PS group president Susanna Vela argued that this raises questions about whether fiscal effort is equitably shared, with labour, entrepreneurship, and business activity shouldering a disproportionate load compared to certain capital gains. "The data show we need to debate how this effort is distributed," she said.

The call for scrutiny also covers corporate tax, where deductions, exemptions, compensation mechanisms, and other tools can reduce the taxable base despite reported profits. The PS wants details on their cost to public finances, the beneficiaries involved, and their continued justification—acknowledging possible merits like preventing double taxation or aiding key sectors.

The party stressed it seeks no broad tax hikes that could undermine Andorra's low-tax appeal. Instead, it aims for audits to assess effective tax rates by income type, ensuring proportional contributions within a competitive framework. "Low taxes shouldn't mean unequal taxes," Vela noted, framing the issue as better effort-sharing rather than higher rates.