Agreement on new finance system signed in Palma

Jesus Posada, the central public administration minister, and Balearic minister Antoni Garcias signed the agreement for the new system of financing the region, which means an extra 120 million euros for the islands. At the end of the signing, Posada told the media that it was a specially important agreement because it was a completely new system which had been reached by consensus. He added that it was a decisive step towards balancing finance with the amount of tax produced and would give people a much better idea how each administration receives and spends its cash. The agreement means that the local government will manage 33 per cent of income tax paid in the islands, inheritance and gaming taxes and up to 35 per cent of IVA, among others.