Most Spaniards sceptical on tax hikes

26th October 2009, Comments 0 comments

Ninety-three percent of Spaniards think government plans to raise taxes will not help the economy rebound from a sharp downturn, a public opinion poll published on Sunday suggests.

Madrid - Ninety-three percent of Spaniards think government plans to raise taxes will not help the economy rebound from a sharp downturn, a public opinion poll published on Sunday suggests.

Prime Minister Jose Luis Rodriguez Zapatero last month announced that his Socialist government's budget for 2010 would impose tax hikes equal to 1.5 percent of total output to rein in a ballooning deficit in public finances.

But 50.8 percent of those surveyed by pollsters DYM for the ABC newspaper said he should lower taxes, when asked: "In the circumstances Spain finds itself in, what do you think Zapatero's government should do in terms of tax policy to improve the economy?".

Another 41.8 percent said the government should keep taxes at their current level while 6.2 percent favoured higher taxes. The rest were undecided or refused to answer.

The nationwide poll of 982 people was conducted from September 18 to October 7.

The planned tax increase includes a rise in the standard sales tax rate from 16 to 18 percent and the elimination of a EUR 400 (USD 600) annual rebate introduced in the second half of 2008 for all 16 million taxpayers.

The measures represent a U-turn for the Socialists, who had cut taxes and abolished a wealth tax since coming to power in 2004.

Madrid expects the public deficit to swell to 9.5 percent of GDP this year -- well above an EU limit of 3.0 percent -- from 3.8 percent in 2008 due to the fiscal costs of recession and related social protection spending.

AFP/Expatica

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