Government loses out over environment tax

The Balearics will lose 25'000 million pesetas under a ruling by the Constitutional Court, which has repealed the tax on installations which have an adverse affect on the environment. Balearic finance minister Joan Mesquida held a press conference yesterday, in which he evaluated the court decision which said that the tax, introduced by the regional government, was unconstitutional. The government will now have to return the 7'500 million pesetas which it has already collected, plus interest, cancel loans it had taken out based on expectations of raising 13'500 million pesetas more, and readjust the budget for next year, which had included 3'300 million pesetas. The court case had been brought by the central government which said that the regional government did not have the power to impose the tax. GESA, Repsol and other companies affected had also appealed against it. Mesquida said yesterday that when the budget for 2000 was being debated, he had pointed out that the government court action was a threat hanging over the regional accounts. Mesquida said that since the autonomy statutes were approved, the Balearic Parliament had introduced three new taxes and two of them had been declared unconstitutional. The other tax was on lotteries, passed in 1990 and overruled by the Constitutional Court in 1995. The only regional tax in force is one on bingo prizes. Mesquida is seeking a meeting with his central government counterpart, Enrique Jiménez Reina, in an effort to negotiate the situation. He said that three of the 12 judges had voted in favour of the tax, adding that the sentence was “bad news “ for the Balearics. He said that his chief concern now was to reduce the effects of the sentence on the budget to a minimum.