WorriedPalma to raise VAT hike issue with Madrid

PALMA
THE President of the Balearics, Francesc Antich, told the local parliament yesterday he and the government is worried about the damage the proposed two percent rise in VAT is going to have on the region's tourist industry next year and has vowed to raise the issue with Madrid.

From July 1 of next year, the Spanish government aims to increase the standard rate of VAT from 16% to 18%, and to increase the reduced VAT rate currently applied to services and food production from 7% to 8%.

On Monday, Manny Fontenia-Novoa, the Chief Executive of the second largest tour operator in the world, warned the Balearic travel industry and politicians that the increase in VAT could spell “disaster” for the tourist industry.

He stressed the fact that France and Greece this year scrapped VAT for the tourist industry to help the sector survive the recession.
Antich said yesterday that the Balearic government is already studying a number