IT has been revealed that all bars and restaurants in Palma de Mallorca will be exempt from paying the terrace tax until next year.

Costing Palma City Council an estimated €1.8 million, the measure hopes to help hard-hit bars and restaurants in the capital overcome the coronavirus crisis.

Until now, an exemption had been agreed for the first quarter of this year, however it was finally decided that it should be extended until 2022.

Under the current COVID-19 restrictions on the island, the use of the interior areas of bars and restaurants is strictly prohibited, meaning that establishments without a terrace are unable to open under these rules.

Realising the rule’s impact on local businesses, for months, Palma City Council has allowed those without a terrace to create a temporary one in an adjacent parking space.

At the time this measure was approved, mayor Jose Hila claimed that around 1,000 establishments would benefit from what he labelled as an ‘extraordinary exception’ and that it would carry ‘absolutely no economic cost’.

He said: “With this measure we have saved many families from economic ruin, encouraged citizens to use terraces and recovered space once used for parking.”

However, today the mayor said that the initiative proved more popular than expected, with almost 2,000 bars and restaurants submitting an application for the license.

It comes as business unions have demanded that the Balearic government allow the opening of the interior areas of bars and restaurants when Spain’s state of alarm ends on May 9.

Although longer opening hours are being discussed internally, health minister Patricia Gomez said the government will not budge on the matter since the ‘interior areas are where there is the highest risk of infection’.

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