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Spain raises taxes on alcohol, tobacco

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(Globalpost/GlobalPost)

Madrid, Jun 28 (EFE).- Spain's government on Friday announced tax hikes on alcohol and tobacco and limits on corporate tax deductions, saying the measures would boost revenue by 4.7 billion euros ($6.1 billion) annually.

Speaking at the end of a weekly Cabinet meeting, Finance Minister Cristobal Montoro said 3.65 billion euros per year would be raised by limiting the amount large companies can deduct for securities portfolio losses, while another 700 million euros would come from higher taxes on alcohol and tobacco and 340 million euros from a new tax on fluorinated gases.

The tax hikes will be enacted by decree and take effect Saturday after their publication in the official gazette.

A 10 percent tax increase will levied on alcoholic beverages, although wine and beer will be exempt, while the levy on tobacco will be "reconfigured" so that it is no longer directly tied to the final price of the tobacco product.

Montoro said the new tax on fluorinated greenhouse gases will mainly affect manufacturers and importers of air-conditioning units.

Separately, in its Friday meeting, Spain's government established a 133.3-billion-euro spending limit for 2014, up from a 126.8-billion-euro ceiling a year earlier.

The government is projecting revenue of roughly 128.2 billion euros next year, Montoro said.

Spain is seeking to bring its budget deficit, which came in at 10.6 percent of its gross domestic product last year, down to the European Union's limit of 3 percent of GDP.

http://www.globalpost.com/dispatch/news/agencia-efe/130628/spain-raises-taxes-alcohol-tobacco