THE Balearic Parliament agreed yesterday to urge central government to reduce value added tax (IVA) on transport between the islands and and mainland.
Regional government wants to see the rate of IVA for this area of transport reduced from seven to four percent. It also wants central government to approach the European Union to ask that citizens of the Islands remain exempt from paying IVA on the cost of the ticket and from commission on its issue.
Miquel Nadal, a Balearic MP from the Union Majorca party (Union Mallorquina) which forms part of the Parliamentary group spearheading the proposals, defended the argument for IVA exemption.
MP Joan Font argued that it is easier for central government to modify the state law to reduce IVA from seven to four percent than to establish an exemption clause applying only to the Balearics. Font said the issue of inter-island, and island-mainland travel should be addressed one step at a time.
He suggested the first matter to be tackeld was the travel discount increase for Island residents from 33 to 50 percent and the establishing of a public air service between the Islands and the mainland.
The Majorcan Socialists (PSM) put forward an amendment which was eventually rejected, where they proposed calling on central government to exempt Balearic residents from paying taxes on air travel between the Islands and between the Islands and the Peninsula. PSM deputy, Eduard Riudavets, defended the proposal because it didn't involve modifying any European Union directive, and, in his view, not paying the tax would mean a form of compensation for the disadvantages of Island living, an economic imbalance which the government is committed to rectifying.
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