by Jason Moore

Beware the Spanish authorities are desperately trying to raise extra funds because of a major shortfall in their budgets. New taxes are being introduced almost daily by the local and central administrations. Also, existing taxes are being raised. The Spanish government is in the process of raising the Valued Added Tax rate which will see the price of goods and articles increase. Already the tourist industry has warned that it could cost them millions of holidaymakers. The tourist industry is very price sensitive and any increase could send tourists elsewhere. The Spanish government has already raised income tax and other personal levies. Local councils have also been forced to try new ways to increase revenue. In Calvia the rubbish collection rates for boat owners have risen dramatically and other councils have also increased local levies. What next? Well the Spanish government has been forced to borrow billions and this money has to be repaid. But a word of warning. Any additional taxes on the tourist industry will have a major impact on the economy. Spain needs a bouyant tourist industry more than ever at the moment. Revenue from tourism could just lift the Spanish economy out of recession.Perhaps, the government could target the so-called black economy, people who are paid but who do not declare it to the the tax man. I suspect that billions of euros is paid out in this way in Spain. Forget tourism and chase the tax dodgers.


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