Palma bus company won't apply VAT hike

Palma.— The VAT increase from 8 to 10 percent is due to come into force on 1st September, but EMT President Gabriel Vallejo said yesterday that rather than pass on the increase to its passengers, the bus company is going to pay Central Government out of its own pocket until the end of 2012. Vallejo, who has spent several weeks looking at whether or not it were possible to avoid the VAT increase because passengers have already had to swallow a 23% increase in fares, said: “This means the bus company will need to find between 400'000 and 500'000 euros.” He added that it was not yet clear whether the bus company will be able to continue supporting the VAT increase of its own accord from the start of 2013. Over the course of a year, EMT will have to find 1.5 million euros to meet its obligation to Madrid.