Plan to hike tax on alcohol and tobacco by 10pc

1st September 2005, Comments 0 comments

1 September 2005, MADRID — Alcoholic drinks, cigarettes, petrol and electricity may be about to get much more expensive in Spain.

1 September 2005

MADRID — Alcoholic drinks, cigarettes, petrol and electricity may be about to get much more expensive in Spain.

The government is considering increasing the price on alcoholic drinks and tobacco by 10 percent.

Cigarettes in Spain are among the cheapest in Europe, one of the reasons which some health campaigners say explains the high numbers of younger smokers.

Electricity prices would also rise under new tax proposals being suggested by Madrid to raise EUR 1 billion in two years.

Central government also wants to give Spain's regional governments the power to raise taxes which petrol stations have to pay to them.

They say this could mean they will be able to raise EUR 697 million to help pay for health services.

The wide-ranging proposals were unveiled by Economic and Treasury minister Pedro Solbes who said this would help find the EUR 3.3bn deficit in the health budget.

Spanish prime minister José Luis Rodríguez Zapatero said in a press conference that if the proposals were accepted it would allow central government to give regions more cash to pay for the health system.

But the conservative opposition Popular Party (PP) said it was the first tax hike by the Socialist government and would be inflationary.

Miguel Arias Cañete, economics shadow spokesman for the PP, said it would increase inequalities by creating "17 different health authorities" which received different amounts.

He said it was putting a patch over financial problems with the health service.

[Copyright EFE with Expatica]

Subject: Spanish news

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