13 Jul, 2012 @ 12:07
1 min read

Sales tax to rise as new austerity measures announced

mariano rajoy

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.



  1. “circumstances change and i have to adapt…” Its great. So political.
    Elect me! Elect me! i’ll line my pockets, make my friends rich, and do whatever i think is best, for me. Damn the consequences.

    Now that all the jobs have gone to slave markets in china, And a few company owners are getting filthy rich, isnt it about time we demanded a better world?
    There are many good ideas around, dont be distracted by the extremes (communisum, fascism).
    Some easy ideas… dont be influenced by the USA !!! No more ‘too big to fail’ crap. No bonuses at all. Reduce top saleries. (if managers think they will get paid more abroad, let them go and we’ll see who laughs last).
    the list goes on. Raising VAT is just dumb.

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