Treasury minister announces tax rises

Treasury minister announces tax rises

The basic income tax rate was raised in December 2011 from 24% to 24.75% as a result of the new Government’s austerity measures. When it was announced, the government said that the increased rate would be in place for 2012 and 2013. Ministro de Hacienda y Administraciones Públicas Cristóbal Montoro has today announced, however, that it will remain in force throughout 2014 as well. Sr Montoro said that the continuation of the increased income tax rate through 2014 is because it is not feasible to bring it back down to its former level before 2015.

The minister was speaking at a press conference in which he also announced the introduction of new “green taxes” and the removal of some corporation tax deductions for large companies. He ruled out increases in IVA (equivalent to VAT on the mainland – the Canaries has its own IGIC), but announced rises in “special taxes”: he did not specify which ones would bear the brunt of the increases, but said they would not be oil taxes, nor taxes relating to the hotel and catering industry. That doesn’t leave too many options, and it seems quite possible that we’ll soon be seeing rises in tobacco, alcohol, and electricity. The news came as a surprise after PM Rajoy’s answer to journalists only on Wednesday that there would be no tax rises.

 

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