Local town councils stand to lose 28.3 million euros if the central government goes ahead with plans to scrap the IAE, the tax on business activities. The Council of Majorca has drawn up a report detailing the economic repercussions of such a move, town by town. A spokesman for the Council of Majorca expressed concern at the proposal, as the IAE represents four per cent of the town councils' income, although in some cases, it represents a lot more. In Lloseta, for example, it accounts for nearly 26 per cent of the income, and in Porreras it is 12 per cent. The Palma city council would lose 17.1 million euros, the largest single amount, while the Calvia council stands to lose 3.1 million euros. The Council of Majorca itself will be a loser, to the extent of 5.3 million euros if the government goes ahead with its plans. But what is causing the Council the most concern is that the IAE represents more than 51 per cent of its income from taxes. The government announced its plans during the last election campaign two years ago, but has still not explained what it will do to compensate the councils for their loss.

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