Staff Reporter
PALMA City Council is to put up rates and local taxes in 2005 by an average of 2.94 percent.
This figure has been calculated on a basic increase of 3 percent although the cost of living index (IPC) for 2004 stands at 3.5 percent.
Rodrigo de Santos, Town Planning councillor said yesterday that the fact that the rates rise isn't as high as the IPC, demonstrates “the policy of tax reduction” applied by the City Council led by Catalina Cirer of the Partido Popular.

De Santos added that through this policy, the Administration intends to operate its “less taxes and more services” commitment to the citizens of Palma.
Pedro Alvarez, counciller for Tax and Civil Service, reported that the figures submitted for next year's rate rises still need to go before a full meeting of the City Council for debate and approval.

Speaking broadly, he signalled that there will be a 2.10 percent rise in local taxes; one of 2.77 percent in rates and one of 3.95 percent on public expenditure taxation.

These taxes go to make up 56 percent of all the municipal income, Alvarez explained. Of these, 38 percent come from direct taxation, 4 percent from indirect taxation and 14 percent from public expenditure.

With regard to taxation, Alvarez said that economic activity is that which is going up the most (3 percent), while tax on property will be subject to its first change since the year 2000 (1.65 percent) but tax on construction doesn't fluctuate under the cost of living index.

On the subject of rates, Alvarez drew attention to the fact tht from 2005 onwards, the City Council will charge for cashpoints which are publicly available. A minimum of 340 euros and a maximum of 510 will be imposed according to the whereabouts and quality of the area where the cashpoints are located.

Also going up will be the tariff on breakdown and towing away vehicles (8.69 percent) due to it being a service which incurs charges for the Council, but parking (ORA) charges will not increase in 2005.

Palma is currently in position number 42 out of 52 regional capitals in terms of tax burden levels across the country.
From 2006 onwards, said Alvarez, it is also envisaged that contributors will be able to pay “a la carte”, meaning that people will be able to decide how and when they pay their taxes, thus making collection easier for City Hall and financial planning easier at home.

According to which means of payment they choose, citizens will be eligible for a a maximum discount of 5 percent on their taxes.
As of 1 January 2005, people will be able to pay on the Internet or through an automatic cash machine to make payment easier and to avoid queues.


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