By Helen Pierpoint
MARIANO Rajoy has presented a new wave of austerity measures which include an increase in IVA (VAT) from 18 to 21 per cent to be enforced on August 1.
Restaurant and small business owners on the Costa del Sol may be relieved to know that reduced VAT will only be increased from eight per cent to 10 per cent.
Meanwhile civil servants are to be stripped of their Christmas bonuses, the unemployed are to see a drop in their benefits and the raising of the retirement age from 65 to 67 is to be sped up.
Bonuses allocated to employers for taking on more workers will also be removed and the number of councillors in town halls is to be reduced by 30 per cent.
The new cuts come as miners march through the centre of Madrid to protest cuts to industry subsidies.
The aim is to shave €65 billion off the state budget over the next two and a half years.
The increase in sales tax has come as a shock to many who view Rajoy’s new plans as a political U-turn.
“I said I would lower taxes and I am actually raising them. Circumstances change and I have to adapt to them,’’ explained Rajoy.