However, these are not always straightforward, given the difficulties in agreeing how to apply the fairness principle and because economic theory and empirical evidence are not always capable of reaching irrefutable conclusions regarding the effects of the various taxes on economic growth. 31  A first approximation that may be useful is to compare the composition of tax receipts in Spain with their composition in other European countries. In this respect, Spain stands out for its low level of indirect taxation, which includes VAT, excise duties and, as a particular case of the latter, environmental taxes. Specifically, almost half of the difference between total tax revenues in Spain and the arithmetic mean for the euro area, as a percentage of GDP, is explained by the higher proportion of goods and services taxed at the reduced and super-reduced rates of VAT. A very significant part of this gap is also explained by the lower level of environmental taxation, which is primarily the result of low taxation of hydrocarbons. As regards direct taxation, corporate income tax receipts are also low in Spain. In contrast, when taxes on personal income are considered together with social contributions, their contribution to the revenue gap with the euro area is roughly zero. As highlighted by the second phase of the public spending review undertaken by the AIReF, there is considerable scope to reconsider a characteristic feature of the Spanish tax system, namely the particularly high level of tax benefits.
Indeed, as I have said in some of my recent appearances in Parliament, in certain cases it may be appropriate to use some of the European funds to defray the initial or transition costs that certain structural reforms typically entail. One such example in this respect could be the introduction of the so-called “Austrian backpack” scheme, which various institutions (including the IMF) have recommended to combat the duality of the Spanish labour market. However, the introduction of such a scheme entails transition costs, insofar as the costs and payments implicit in the new scheme are not distributed between firms and employees in the same way as in the current scheme. These transition costs, the determination of which requires very detailed prior analysis, could be met, at least in part, by the European funds. 4 Conclusions The macroeconomic setting in which the Draft Budget has been prepared is, as we all know, complicated and uncertain. The outlook for activity and employment outlined in it is subject to significant downside risks. In such a complex situation, budgetary policy must continue 35  countering unfavourable macroeconomic developments. And this, if the downside risks materialise, includes the need to allow the free play of the automatic stabilisers, even though a bigger budget deficit ensues. In parallel, against the current backdrop, discretionary measures must be more focused on the population groups and firms most affected by the adverse effects of the pandemic.