Corporate tax cut to boost Spanish exports
20 April 2005, MADRID - Spain's Socialist government is to cut corporate tax in an effort to boost the country's competitiveness abroad.
20 April 2005
MADRID - Spain's Socialist government is to cut corporate tax in an effort to boost the country's competitiveness abroad.
Prime Minister Jose Luis Rodriguez Zapatero said the move was designed to make starting a company easier in Spain.
The move comes as economic statistics show Spain is becoming less competitive abroad.
The trade balance – the difference between exports and imports - has never been worse.
At the end of 2004, imports into Spain rose 11.9 percent while exports only increased 5.1 percent.
The trade balance in 2004 was five percent of gross domestic product, which represented a record high for the country.
And only 100 Spanish companies account for 42 percent of all exports.
"It is important that Spanish companies bank strongly on the US market, and that should be a priority for Spain," said Zapatero.
Since the EU expanded to 25 countries, many multinationals have moved from Spain to Eastern Europe or Asia as costs and labour is much cheaper.
The present government wants to change the Spanish economy, encouraging more technology firms.
Funding for research and development will be increased by 25 percent in 2005.
The tax change, due to be unveiled in the summer, will also be accompanied by a boost for start-up companies.
A new bill, passed in March, will allow venture capital companies to invest the same as the law permits in non-Spanish firms.
[Copyright EFE with Expatica]
Subject: Spanish news