Government finally admits that VAT hike will hit tourism

PALMA
CENTRAL government finally admitted yesterday that its hugely unpopular and controversial decisions to raise IVA (VAT) by two percent in July “may have an impact” on the tourist industry.

The travel sectors in Spain and overseas, with support from the airlines, have been urging the government to either postpone or cancel the increase in VAT and the government only just got the legislation approved by a margin of just six votes in congress last week.

But, despite widespread opposition from all sectors of business and industry, the government is going ahead claiming that an increase in VAT will not hamper the country's ability to compete with other European countries and holiday destinations.