President Armengol and finance minister Catalina Cladera of PSOE with Vice-President Barceló of Més. | Jaume Morey


The regional government needs to soon set its budget for 2017. Much has been made of the difficulties in doing so because of the acting capacity of the national government and so finance ministry. The Palma government isn't clear as yet as to how much room there will be for manoeuvre and is pressing for a higher deficit than the 0.5% that was established earlier this year.

With or without Madrid's input, the Palma government is looking at what it will need to satisfy its spending requirements, and that means - potentially - new taxes or increases to existing ones.

PSOE and Més, who form the government, are looking specifically at environmental taxes. But the two parties can't agree on them. Podemos is inclined to back Més on the introduction of two taxes - one for polluting emissions and the other related to the installation of power lines. PSOE is advocating alternatives. Some among the party are even talking about putting up the tourist tax (aka ecotax), a possibility that Podemos has also flagged.

Setting the budget for 2017 was always destined to be something of a battle between the parties of the government "pact", and so it is proving to be.

Further to the tourist tax, tourism minister Biel Barceló said today, as he has previously said, that the tax can be raised or lowered just like any other tax. He suggested, though, that it was "best not to touch it" during the current legislature, which would mean until 2019.

Following a meeting with the Aptur association for holiday rentals, he also said that the government is working on adjusting the tax modules for next year so that they are more in line with "reality". This is a reference to systems of tax remittance as opposed to tax rates.