Spain to levy new tax on rich: PM

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Spanish Prime Minister Jose Luis Rodriguez Zapatero said Wednesday he would shortly announce a new tax on richer people as part of a tough austerity package proving hugely unpopular.

"The government aims to ask those better-off citizens to do more (for the country)," Socialist leader Zapatero told parliament.

The government is now looking at this "gesture of solidarity" on the part of the rich and details will be announced in the coming weeks, he said.

"The government has asked for a collective effort by the people to economise and cut state expenses which particularly affects civil servants and ... pensioners in 2011," the prime minister said.

On that basis, "the effort must be as equitable as possible," he added.

Last week, the government approved a new 15-billion-euro austerity package which includes a five-percent pay cut for civil servants and a freeze on pensions.

Those cuts, which are to be submitted to parliament on Thursday, are on top of a 50-billion-euro (63-billion-dollar) austerity package announced in January as Madrid tries to put its public finances in order.

The government is trying to bring the overall public sector budget shortfall down to the eurozone limit of three percent of Gross Domestic Product by 2013 from 11.2 percent last year.

© 2010 AFP

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