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Palma—The ruling Partido Popular used its overall majority yesterday to unanimously vote in favour of introducing the three new highly controversial taxes on packaging, in particular in the beverage industry, the car hire sector and large hyper markets.

Scores of representatives from the three affected sectors were in parliament yesterday to listen to the debate hoping that the government would see sense considering the criticism it has received from the business sectors here, on the mainland and in the United Kingdom where the Association of British Travel Agents have been very outspoken.

As the Bulletin reported, the Socialists told parliament that, once the new taxes have been applied, the Balearics will be the most expensive region in Spain and that will hit tourism and dent domestic consumer confidence even further.

Research on the impact of the taxes have concluded that they will cost the average family an extra 500 to 600 euros per year.
The car hire industry is deeply opposed to the new tax and Ramon Reus, President of the Balearic Association of Car Hire Companies, warned yesterday that his members “will do everything possible not to charge the tax. “The government has totally ignored us, shown no interest in what we have to say and by taxing the car hire companies they are making the local private sector suffer even more while defending the global chains which pay their taxes overseas,” Reus added.

Abta has called on the Balearic Islands to reconsider plans for an eco tax on rental cars due to be introduced in April. The planned tax of 3 euros to 7.5 euros a day, depending on a vehicle's CO2 emissions, would add up 52.5 euros (£46) a week to the cost of car hire.

Customers will be expected to pay the tax upon collecting their vehicle even if they have pre-paid the full cost of hire.
Abta contacted the Balearic authorities two weeks ago seeking a delay and calling on them to reconsider.
Nikki White, Abta head of destinations and sustainability, said: “Hasty decisions that don't give travel businesses time to prepare and take tourists by surprise can have a very damaging impact. Taxing tourists does more harm than good in the long term.” Even the Spanish tourism minister Jose Manuel Soria denounced the tax plans at World Travel Market in London last November, describing the levy as “unfair”.

However, the Balearic government aims to raise 15 million euros a year from the tax.
It is not the first time the Balearics has introduced an eco tax - it tried something similar 10 years ago.
The islands imposed a tax of one euro per person per day on hotels in May 2002 - about 62p a day at the time - raising 12 million euros in the first year for use on regeneration projects. Children under 16 and pensioners were excluded.

The tax was scrapped in November 2003, ironically by the Popular Party, following a change of government.
Abta denounced the accommodation tax as “a fiasco from start to finish”.
And now, the PP is introducing not one, but three eco taxes which the business sectors fears will do more harm than good to the local economy.