Spanish IVA Tax Increase Confirmed

The Spanish Prime Minister, Mariano Rajoy, addressed Congress today, Wednesday, to present the economic cuts which intend to save 65 billion € by the year 2015.

The headline news is that IVA/VAT is to go up from 18% to 21% and from 8% to 10%. The 4% rate remains unchanged.
The VAT changes will be brought in with the publication of the next BOE, official state bulletin, and means this Sunday or Monday.

The number of councillors in Town Halls is to be reduced by 30%, Civil servants and directors in administration will lose their extra payment at Christmas.

Tax breaks buying a property will end from 2013.

Unemployment pay will drop after the sixth month. The reduction after the sixth month is to 50% of the regulatory base from the current 60%, although unemployment pay entitlement will remain at 24 months.

Most of the bonuses paid to employers for taking on workers will be removed.

The number of ‘liberados sindicales’, union members who do work for the company as they are supposedly occupying themselves with union business, is to be ‘strictly’ controlled to meet the law.

Finding of political parties and unions will be reduced by 20%.

The Government is to reduce the payment to the families of dependents by 15%.

One bright point, employers will see their social security payments reduce by 1 point next year and another in 2014.

Rajoy asked for comprehension and said Spain ‘is in a situation of extreme weakness’ and he said the recession would continue next year.
He said ‘We have opened a door to the new model of the European Union’.

PSOE leader Alfredo Pérez Rubalcaba said that ‘Spain is worse today’. He said since the arrival of Rajoy ‘inequalities had increased’. He underlined the errors of the Government, mentioning Bankia and labour reform, and said rather than increase IVA, a new tax should be placed on ‘grand fortunes’.

Source – Typically Spanish

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