Business wages war on the government

The so-called “green” taxes will be levied on the packaging industry, the car hire sector and the large hypermarkets in a bid to raise extra funds to try and reduce the region's deficit.

However, business is not having it and yesterday they made it quite clear to the government that unless it carries out a U-turn, it could find itself in the constitutional court.

The government claims the new taxes will generate some 35 million euros per year but they face a real battle if they push ahead with plans to enforce the new levies.

Horacio Gonzalez from the Federation of Food and Drink Industries said yesterday that they intend to do everything within their powers to stop the taxes from being introduced. “This is the most serious attack yet on out competitiveness and this could set a precedent which other regions could follow,” warned Ignacio Garcia representing the distribution sector.

The Balearic government has been warned about these discriminatory taxes both at home and abroad, the British travel industry has also urged the government to rethink its car hire tax which has already led to cancellations because it has already increased the cost of renting a vehicle.

The business sector, already having to cushion the affects of the increase in VAT last September. claim that it will be unable to absorb these new taxes and that they will have no option but to pass the cost on to the consumer who, gripped by the recession, may simply decide not to pay and therefore the government will not raise its 35 million euros. In fact, captains of industry warned that the taxes could lead to even more business going under and less new jobs being created. The President of the Balearic Restaurant sector, Pilar Carbonell said that the British and German media are already complaining about how expensive Majorca has become and these taxes will just push prices up even further.