30 Mar, 2012 @ 15:51
1 min read

Spain cuts budget by 27 billion euros

By James Bryce

THE Spanish government has announced cuts totalling 27 billion euros in what is one of Europe’s fiercest ever budgets.

A pay freeze for civil servants and departmental budget cuts of 17 per cent are among a raft of measures announced by budget minister Cristobal Montoro on Friday.

Spaniards will experience a seven per cent rise in electricity bills from April 1, and while VAT will not be raised, big business will be hit with increased corporation taxes.

Many of the measures announced are aimed at closing loopholes exploited by corporate business, meaning many pay tax of just 8.5 per cent.

They also include a 10 per cent ‘no-questions-asked’ tax on money that emerges from the black economy, which the government hopes will save six billion euros a year.

There are no income tax rises because these were announced in December, accounting for another six billion euros of the savings.

Deputy Prime Minister Soraya Saenz de Santamaria acknowledged that the nation was in an ‘extreme situation’.

“Our top priority is to clean up public accounts,” she said.

The budget was approved at a cabinet meeting on Friday and is aimed at helping Spain meet a deficit target of 5.3 per cent this year.

James Bryce

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  1. A brave budget but still puzzling on first sight: Only 16% cuts to one of the most unproductive, bloated public sectors in Europe. Meanwhile a *rise* in corporation tax in a country desperate for jobs? Hmmm.

  2. I would like to bring to your attention the following.
    I live in a small village in Malaga called Almogia. In this village, A considerable number of British persons have decided to make their home here.
    The problem is, Many of these people do not pay their taxes, Work without papers, Have British registered cars which have been here far beyond the permitted time allowed.
    For us law abiding citizens, This is not on. By working as Gardeners, Mechanics, Builders, & even taxis. They are steeling the food from the mouths of the Spanish living in the village, Struggling to put food on the table for their children.
    The police have been told & do not seem to want to take action against them. This is happening throughout the Costa del sol.
    You would think that with the current financial difficulties here, The people in power would be only to eager to act on this.
    The Hacienda has said they were looking into the problem, But this is unlikely to bear any fruit. Can you tell us why these people are allowed & able to get away with it. Now the junta elections are over, Our next port of call will be to them. They have to understand they are losing a small fortune from these tax dodgers. You probably will not publish this, But We feel these people are no better than the scroungers & immigrants they complain about in the GOOD OLD UK.

  3. Why concentrate on the expats Christopher? What about the Spanish who avoid paying taxes (they are expert at it), the Spanish who work and claim unemployment benefit (rife in Andalucia) and the Spanish who drive cars without ITV or insurance (lost count of those).

    Do tell us.

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