Car hire sector calls on government to drop tax

THE car hire firms grouped together in the AEVAB association will call on the Balearic government not to introduce the proposed new tax on its activities. The group's chairman Ramon Reus said “the government's commitment with AEVAB was that the tax would be applied if members accepted it, otherwise it would be withdrawn. And so we hope that they will keep their promise.” He added that if the government goes ahead and applies the tax, AEVAB will call an extraordinary general meeting to study what steps it can take to stop the tax, which, he said, was “unacceptable” in the form in which the government is presenting it. The proposed tax is about five euros a day and 0.03 euros per kilometre, and it has already been reported in some parts of Europe as a tax on tourists, although the government has denied this. Reus also accused the government of trying to “take advantage of an association of businesses, which approached the government for help, to “put an end to the unfair competition which is ruining many businesses here.” He added that they had gone to government leader Jaume Matas “in search of help and had found something they had not expected.” The government maintains that the tax is to root out companies which use car hire as a cover for illegal car exports.
It expects to raise 12.5 million euros a year from the tax which it initially said was to help pay for the national health service, but it recently backtracked and said it would be used for general purposes. No date has been set for its introduction, mainly because of the widespread opposition from the car hire sector.