THE Balearic branch of the Inland Revenue has not been immune to the recession, with its Palma-based office reporting yesterday that income during the first half of this year was down by 23 percent compared to takings during the first six months of 2008.

Job losses, the dole queue and low spending by cash strapped consumers have meant that both the government in Spain as a whole and in the Balearics have seen their most important form of revenue slide alarmingly.

And it's not just full-time residents in Spain who are contributing to the slump - foreigners who live in Spain more than six months of the year paid 18'146 million to the Spanish tax authorities between January and June this year, a reduction of 34.6 percent in comparison to what they had paid during the same period in 2008.

With regard to tax on the sale of goods (value added tax) known in Spain as IVA, the Inland Revenue reported yesterday that it collected 219'942 million euros in the Balearics during the first half of 2009 which represented a fall of 24 percent on what had been sent to the Treasury between January and June in 2008.

The downturn was a direct reflection of restricted spending by both residents and tourists in the Islands. The report similarly shows losses for the Inland Revenue in “special” taxes on fuel, alcohol, tobacco and electricity which again are all linked to limited consumer spending.


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