In a bid to generate additional income for the state, from July 1, 2010, value-added tax (VAT) in Spain increased by 2%, prompting fears that prices may inevitably rise as a result.
The standard rate of VAT, levied on alcoholic drinks, tobacco, and CDs for example, rose by 2%, from 16% to 18%, while the reduced rate imposed on general food, health and sports services, and the hotel and catering industry increased from 7% to 8%. The super-reduced rate applied to items of basic need, including bread, books, magazines and medicines, remains unchanged, however, at 4%.
The government estimates that the VAT rise will serve to generate in the region of around EUR5.15bn in additional revenue for the state, of which EUR1.9bn is expected to be generated in 2010.
.Tags: tax | business | individuals | tax rates | value added tax (VAT) | Spain | VAT | Spain
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