As the Spanish government continue to struggle with their public debt discussions over possible tax increases are now taking place.
Despite election promises the government are considering scrapping the home-owner rebate introduced by Rajoy’s government only six months ago following an election campaign pledge.
“Is the government considering scrapping the tax rebate for mortgage holders? Yes,” Deputy Budget Minister Marta Fernandez Curras said to reporters in Madrid yesterday.
“It’s not the first time it’s been done and it can be studied, it is a recommendation of the European Union and it is a traditional recommendation of the International Monetary Fund for this country.”
Curras also added that the government are discussing the possible introduction of an environmental levy and although sales tax is likely to increase she didn’t know when or by how much.
As the government battles with it’s deficit and pressure from Europe they have already backtracked on two election promises; they cut firing costs and raised income tax. Now the pledge to restore the home-owner rebate scrapped by Zapatero’s government is in danger too. Another election pledge they have enacted was to increase pensions – so far there is no mention of a u-turn on that one.
Despite the country’s budget deficit increasing during the first quarter of this year Curras is confident that the government will meet it’s target for 2012.
“The deficit has started on a downward path and we expect that to intensify,” Curras said. “We are determined to meet the budget target.”