The only Spanish television series I have watched with what might be described as some regularity (I very rarely watch television at all) is "Cuéntame cómo pasó". I say regularity but when I last saw an episode it was still based in the Franco era. It has moved on a number of years since then.
The programme's producers have named the series "Remember When" in English. In June last year, there was an announcement that agreement had been reached with London-based New Media Vision for a possible adaptation: more likely for the US market rather than the British. There is a great deal of material to draw on. The series started in 2001 and it has told the evolving story of the Alcántara family from a fictitious area of Madrid. Over the years the background contexts have included Franco's death, the formation of the first democratic government and the 1981 failed coup.
From memory of when I did last watch it, this was a gentle, fairly undemanding, at times funny, at times tense or sad drama-cum-soap opera. Since 2001, it has won numerous awards, as have its actors. Its real glory seasons were the early ones. The third series, broadcast in 2003, attracted audience numbers over the 40% mark. In recent years this has dropped off. The provisional figure for season 17 is down to 17%. Nevertheless, the final episode in the fifteenth season had attracted a record audience.
Is a trend of declining overall viewing figures the reason for it being axed? They are certainly down on where they once were but this isn't the reason. The two main stars - Imanol Arias and Ana Duato, who play Antonio and Mercedes - and the production company, Grupo Ganga Producciones, have been caught up in a Panama Papers kind-of affair. The national television broadcaster, RTVE, believes that it would "unsustainable" to commission a new series because of this.
An ongoing investigation dubbed "Operación City" was opened by a judge at the national High Court. The production company is alleged to have engaged in tax evasion through an offshore network established by a Madrid law firm, Nummaria. The two actors are scheduled to appear before the judge and make declarations. The anti-corruption prosecution service claims that between them Arias and Duato defrauded the Hacienda of almost three million euros. Arias has also been named in connection with an offshore company called Trekel Trading, based in the South Pacific island of Niue.
The charges are clearly serious. But is the broadcaster right to cancel the series? As yet, they are only charges, but reaction - that of the viewing public via social media and newspaper website comments - is generally disapproving of RTVE's decision. Why penalise a whole programme, why penalise the viewers for actions (at present under investigation)? A distinction is being made between television life and real life. As one comment says, it is not Antonio Alcántara who is under suspicion, it is Imanol Arias.
RTVE, one feels, is in a no-win situation: damned if it does, damned if it doesn't. The decision may seem precipitous but the circumstances are embarrassing for the broadcaster. They could prove to be more so were things to pan out in such a way in the courts in the midst of another series being broadcast. On balance, it was probably left with no choice but to take the decision it has. And as the national broadcaster it does have some responsibility and duty. These are times for cleaning up Spain. A national minister, José Manuel Soria, has been forced to resign because his name has appeared in the Panama Papers. He has not been charged with anything, but the association with tax havens was sufficient to bring him down.
The point with what is now being referred to as the "caso Cuéntame" is that there are charges. Yet the actors are by no means the first public figures to find themselves hauled up in front of a judge for alleged tax crimes. Take the footballer Javier Mascherano, for example. He admitted to not paying 1.5 million euros of tax. A one-year sentence is unlikely to be effected. But regardless of the sentence, indeed regardless of the circumstances of the case brought against him, would anyone suggest that his club, Barcelona, be penalised or be somehow cancelled?
The cases are not directly comparable, but is there an argument for saying that Barcelona should have dismissed Mascherano? What does the club do about Lionel Messi, himself named in the papers and with a trial into his affairs due to start at the end of this month? It hasn't exactly been in a rush to distance itself from one of its star players - the star player.
Double standards? Possibly. But some will say remember when such cases might never have even come to light.
Showing posts with label Tax. Show all posts
Showing posts with label Tax. Show all posts
Thursday, May 19, 2016
Thursday, May 05, 2016
The One-Eyed Monster Of Tourism
Ada Colau is the mayor of Barcelona. In 2001 she appeared in a comedy series called "Two Plus One". It was to mark the start and end of Ada's acting career. The critics panned it, no one watched it and a second series was not commissioned.
Apart from this brief excursion into television, it is hard to identify what Ada has ever done. There are plenty of politicians of whom one can ask this, but career politicians are generally sustained and promoted via a political party system. Ada, on the other hand, appears never to have operated via such an apparatus. She's a professional activist.
One doesn't question her good intentions. She was propelled into public view not by television but by her having been the driving force behind the association for those affected by mortgage difficulties and evictions. Ultimately, and as part of the new wave of political formations in Spain, she was involved with the founding of Guanyem in Barcelona and stood as mayor for Barcelona En Comú, an amalgam of groupings that included Podemos, at last year's election.
Given her activism in relation to housing and so also social and living conditions, one can understand that these subjects are to the fore of her agenda in the city. Related to them is the whole issue of accommodation for tourism - holiday lets, if you like. Earlier this month the city's council approved one of its latest prohibitions. Under this, no more tourist apartments can be made available unless existing ones are made unavailable, and then only in areas away from the centre of the city. (In Barcelona, as in the rest of Catalonia, private apartments can be openly and legally marketed for holiday rental under Catalonian legislation.)
The issue of tourist apartments and so of a sense that parts of Barcelona are being overwhelmed by tourism is of a scale that is far greater than in Palma. It is very much a political issue, with the more extreme elements to both left and right making capital out of it. The new prohibition is not totally unreasonable, given the rapid growth of tourist accommodation. If nothing else, it offers some potential breathing space.
However, it is part of a wider policy on tourism, and it is this which betrays an impression that Ada, a product of her activism, is one-eyed. The eye which is turned towards tourism doesn't like what it sees.
Barely a week seems to pass without there being some announcement from the city council that concerns tourism. In the middle of March, for instance, it was stated that a moratorium on any new tourism development would be extended by a year. Against the backdrop of prohibition and moratoria, it is said that a total of 38 projects have been put on ice or abandoned at a loss of some 3,000 million euros of investment. It might be noted, though, that not everything has gone by the board: Meliá expects to open its five-star Me by Meliá hotel in the city centre in 2018.
But it is the latest announcement which exposes Ada's touristic myopia more than others. She is planning on taxing visitors to the city - not for staying in accommodation, as they are already taxed for this, but for simply entering city limits. It would be a tax on sightseeing. So, while tourists are all seeing in Barcelona, Ada sees nothing other than a further way of extracting a tithe from them and of demonising tourists because of her one-eyed view of reality. More than this, it is a crackpot idea. Ada might believe that logistically tourists on excursion coaches can be fleeced for a euro a day (or whatever the tariff might be), but what of other tourists? Discriminatory her tax would most certainly be.
The mere announcement of an intention to tax ratchets up further the noise directed towards a perceived villain - tourism. Ada's idea might well appeal to certain politicians in Mallorca with equally negative perspectives that pander in no small part to a xenophobic minority. Such attitudes exist because, as with Ada, these politicians are blinded by their activist philosophies.
Yet the narrative emerging from elements of the left reveals nothing of an appreciation of where tourism in its mass form came from. Of course tourism is now corporate and capitalist. Of course it is a long, long way from the 1950s, but the origins of this mass movement of people were firmly socialist, developed by pioneers such as Gerard Blitz and Vladimir Raitz, the latter especially. Tourism was for the ordinary man. It was to be affordable and cross-cultural, a means of fostering understanding in the aftermath of war and persecution.
Yes, there are excesses. Yes, there probably should be limits. Yes, there should be co-existence between visitors and residents, but this becomes less achievable because of a wilful, one-eyed ignorance of tourism.
Apart from this brief excursion into television, it is hard to identify what Ada has ever done. There are plenty of politicians of whom one can ask this, but career politicians are generally sustained and promoted via a political party system. Ada, on the other hand, appears never to have operated via such an apparatus. She's a professional activist.
One doesn't question her good intentions. She was propelled into public view not by television but by her having been the driving force behind the association for those affected by mortgage difficulties and evictions. Ultimately, and as part of the new wave of political formations in Spain, she was involved with the founding of Guanyem in Barcelona and stood as mayor for Barcelona En Comú, an amalgam of groupings that included Podemos, at last year's election.
Given her activism in relation to housing and so also social and living conditions, one can understand that these subjects are to the fore of her agenda in the city. Related to them is the whole issue of accommodation for tourism - holiday lets, if you like. Earlier this month the city's council approved one of its latest prohibitions. Under this, no more tourist apartments can be made available unless existing ones are made unavailable, and then only in areas away from the centre of the city. (In Barcelona, as in the rest of Catalonia, private apartments can be openly and legally marketed for holiday rental under Catalonian legislation.)
The issue of tourist apartments and so of a sense that parts of Barcelona are being overwhelmed by tourism is of a scale that is far greater than in Palma. It is very much a political issue, with the more extreme elements to both left and right making capital out of it. The new prohibition is not totally unreasonable, given the rapid growth of tourist accommodation. If nothing else, it offers some potential breathing space.
However, it is part of a wider policy on tourism, and it is this which betrays an impression that Ada, a product of her activism, is one-eyed. The eye which is turned towards tourism doesn't like what it sees.
Barely a week seems to pass without there being some announcement from the city council that concerns tourism. In the middle of March, for instance, it was stated that a moratorium on any new tourism development would be extended by a year. Against the backdrop of prohibition and moratoria, it is said that a total of 38 projects have been put on ice or abandoned at a loss of some 3,000 million euros of investment. It might be noted, though, that not everything has gone by the board: Meliá expects to open its five-star Me by Meliá hotel in the city centre in 2018.
But it is the latest announcement which exposes Ada's touristic myopia more than others. She is planning on taxing visitors to the city - not for staying in accommodation, as they are already taxed for this, but for simply entering city limits. It would be a tax on sightseeing. So, while tourists are all seeing in Barcelona, Ada sees nothing other than a further way of extracting a tithe from them and of demonising tourists because of her one-eyed view of reality. More than this, it is a crackpot idea. Ada might believe that logistically tourists on excursion coaches can be fleeced for a euro a day (or whatever the tariff might be), but what of other tourists? Discriminatory her tax would most certainly be.
The mere announcement of an intention to tax ratchets up further the noise directed towards a perceived villain - tourism. Ada's idea might well appeal to certain politicians in Mallorca with equally negative perspectives that pander in no small part to a xenophobic minority. Such attitudes exist because, as with Ada, these politicians are blinded by their activist philosophies.
Yet the narrative emerging from elements of the left reveals nothing of an appreciation of where tourism in its mass form came from. Of course tourism is now corporate and capitalist. Of course it is a long, long way from the 1950s, but the origins of this mass movement of people were firmly socialist, developed by pioneers such as Gerard Blitz and Vladimir Raitz, the latter especially. Tourism was for the ordinary man. It was to be affordable and cross-cultural, a means of fostering understanding in the aftermath of war and persecution.
Yes, there are excesses. Yes, there probably should be limits. Yes, there should be co-existence between visitors and residents, but this becomes less achievable because of a wilful, one-eyed ignorance of tourism.
Friday, November 08, 2013
The Lunatics Now Have Permission To Enter The Asylum
Why is there not the most almighty outcry about this legislation? Even by the standards of other legislative vandalism and of failures to rectify previous legislative errors, that which is contained in the new law for the electricity sector is the most absurd yet and envisages the levying of fines for non-compliance which are not simply punitive but totally outrageous, so much so that they would of course be impossible to collect, even were they to actually be levied.
To remind you what this legislation entails, all solar panels have to be registered. No longer will it be possible for householders to "sell" excess capacity to the grid, as has been the case and, moreover, panels will have to be connected to the grid, which will enable - wait for it - a tax to be levied on their use. If the panels are not registered and not connected, then the fines can kick in.
The legislation all but signals the end of the hope that householders could be self-sufficient in their energy production and consumption. It is legislation brought about by the government's energy tariff deficit and by the muscle applied by the large electricity suppliers who could see their oligopoly status being undermined. The government has caved in to the industry, has given it what it wants and taken away from the consumer what he or she wants and also taken away from the environment and green energy what it wants. It is an absolute disgrace.
And it gets worse. Included in the bill is a provision whereby inspectors will be able to enter properties to check that connections are as they now must be. They won't need a court order, only if the householder refuses entrance and then has to wait the return of the inspectors along with the police. Already, there are grave doubts being expressed as to the legality of enabling inspectors to act in such a way.
The bedlam that has been created by successive governments' energy policies is now at its most manic. The householder, who could have claimed asylum from invasion by an inspectorate (and not even the police), will find he has no sanctuary. The lunatics in government long took over their own asylum and now they are giving permission for other asylum to be violated. I say again, it is an absolute disgrace.
But why should we be surprised? Why should we think that governments wouldn't bow down to the demands of specific industries. In the Balearics, we have a regional government which has prostrated itself in front of the hotel industry and given it all it wishes, while at the same time having no answer to the question as to how all tourists can be accommodated only in hotels or other permitted accommodation. It has acted without logic, without appreciation of what its legislation will produce. It has acted irrationally, as it has also acted irrationally with its implementation of trilingual teaching.
This is also a regional government which has acted in a discriminatory fashion. Faced with threats from another business sector, the retailers, it found an excuse for not applying its in-any-event idiotic green taxes. It bowed down to the retailers while at the same time failing to scrap the one green tax that has been introduced. The one that has meant, in certain instances, water bills doubling since the start of this year. For households with high water use and with solar panels, life has become that much tougher. And for those households which do have solar panels, they had better get wise as to this new legislation and pretty damn quick. Otherwise, they could find themselves presented with a fine in the several millions.
What will the tax on the solar panels amount to? Good question. But one report has suggested it will be that high that it will be profitable for only a few households to bother with producing their own solar energy.
The sun may have been shining nicely in Mallorca for the past few days, but for all the good it does for green energy, it may as well not bother shining. Ludicrous.
Tuesday, September 03, 2013
The Sun Never Shines On Solar Energy
Between 2006 and 2008, almost 30,000 solar farms were built across Spain. They were the eco-friendly symbols of a renewable-energy policy that made Spain the second largest producer of solar power in the world and they were facilitated by subsidies and the anticipation of spectacular returns on investment. By 2009, police authorities, public prosecutors and investigating judges were reaping their own rewards from Spain's solar boom; they were gainfully employed in pursuing cases of "eco-corruption".
The boom was also fuelled by the issuing of licences to both build the farms and to connect to the grid system. Land where connection points were to be created to dump solar energy into the grid became highly sought after, as was the information as to where these connection points would be. Trafficking in licences resulted as did the trafficking of money; a bent construction industry was able to launder illegal earnings into this new boom market and to look forward to even greater earnings in the process.
At the end of 2010, the Spanish Government stated its intention to attack the so-called "tariff deficit", which is the debt incurred from the cost of running the nation's electricity system relative to revenues from the sale of energy. The government wished to do so in order to be able to cut consumers' energy bills by 2013. In May this year, the tariff deficit stood at 26 billion euros. At the end of 2010, the deficit was said to have been 14.6 billion euros.
An economic fiasco brought about by the apparently benign intention to develop clean, green energy was being forecast even before prosecutors started to dig into corrupt practices by public officials and construction companies eyeing up more than just nice little earners from solar. The Zapatero administration was being fingered for its economically unsustainable but ecologically idealistic policies. Subsidies in the form of the premiums paid for solar-generated electricity outstripped by ten times the payments for conventionally supplied energy. Though the Zapatero government decided to cut revenues earned by photovoltaic plants by 30% at the back end of 2010 (thus delivering a blow to the renewables industry and its own green policy), subsidies did not end. They have continued under the current government.
If government policy was already well under scrutiny before "eco-corruption" reared its ugly head, less attention was paid to the private sector and in particular to the role of the banks. As with other construction projects, the banks started to chuck money around to speculators. Spanish financial institutions are said to be in for some 20 billion euros worth of loans to renewables projects.
The banking system, still attempting to right itself from the fallout of debt toxicity brought about by its zealous funding of the construction boom and by cheap and unsupportable loans, now faces a further potential crisis - that of default by solar companies which will have subsidies slashed. Tackling the tariff deficit is one aim, another is to cut the amount of solar power that is generated - its capacity exceeds demand by 60%.
In the Balearics, there was a scheme by which the regional government was issuing grants of up to 30% of the cost of renewable-energy installations by householders. The period for applications for these grants ended in January last year. By this time, national government was already putting in place plans to tackle the deficit and excess solar capacity, part of which came from householders' own excess energy being sold to producers.
Such sales will now stop. But more than just stop paying householders to help supply the electricity system, these same householders will, under new laws, be obliged to connect solar panels to the grid. Why? In order to tax the use of solar panels. The result will be that it will become more expensive for households to use solar than to take from conventional energy supplies. And if consumers don't hook their panels up, they will be liable to fines running into the millions.
The absurdity of the situation beggars belief. Legal challenges are bound to result and they may include those in the Balearics, where there was the recent incentive scheme which now turns out to be all but worthless. It is a situation that has come about because of the government's desperate need to cut the tariff deficit, one that it, and not consumers, caused and because of governmental idealism that wished to use an energy supply that is available in such abundance. The sun always shines except when the government decrees that it shouldn't. Utter madness.
Any comments to andrew@thealcudiaguide.com please.
The boom was also fuelled by the issuing of licences to both build the farms and to connect to the grid system. Land where connection points were to be created to dump solar energy into the grid became highly sought after, as was the information as to where these connection points would be. Trafficking in licences resulted as did the trafficking of money; a bent construction industry was able to launder illegal earnings into this new boom market and to look forward to even greater earnings in the process.
At the end of 2010, the Spanish Government stated its intention to attack the so-called "tariff deficit", which is the debt incurred from the cost of running the nation's electricity system relative to revenues from the sale of energy. The government wished to do so in order to be able to cut consumers' energy bills by 2013. In May this year, the tariff deficit stood at 26 billion euros. At the end of 2010, the deficit was said to have been 14.6 billion euros.
An economic fiasco brought about by the apparently benign intention to develop clean, green energy was being forecast even before prosecutors started to dig into corrupt practices by public officials and construction companies eyeing up more than just nice little earners from solar. The Zapatero administration was being fingered for its economically unsustainable but ecologically idealistic policies. Subsidies in the form of the premiums paid for solar-generated electricity outstripped by ten times the payments for conventionally supplied energy. Though the Zapatero government decided to cut revenues earned by photovoltaic plants by 30% at the back end of 2010 (thus delivering a blow to the renewables industry and its own green policy), subsidies did not end. They have continued under the current government.
If government policy was already well under scrutiny before "eco-corruption" reared its ugly head, less attention was paid to the private sector and in particular to the role of the banks. As with other construction projects, the banks started to chuck money around to speculators. Spanish financial institutions are said to be in for some 20 billion euros worth of loans to renewables projects.
The banking system, still attempting to right itself from the fallout of debt toxicity brought about by its zealous funding of the construction boom and by cheap and unsupportable loans, now faces a further potential crisis - that of default by solar companies which will have subsidies slashed. Tackling the tariff deficit is one aim, another is to cut the amount of solar power that is generated - its capacity exceeds demand by 60%.
In the Balearics, there was a scheme by which the regional government was issuing grants of up to 30% of the cost of renewable-energy installations by householders. The period for applications for these grants ended in January last year. By this time, national government was already putting in place plans to tackle the deficit and excess solar capacity, part of which came from householders' own excess energy being sold to producers.
Such sales will now stop. But more than just stop paying householders to help supply the electricity system, these same householders will, under new laws, be obliged to connect solar panels to the grid. Why? In order to tax the use of solar panels. The result will be that it will become more expensive for households to use solar than to take from conventional energy supplies. And if consumers don't hook their panels up, they will be liable to fines running into the millions.
The absurdity of the situation beggars belief. Legal challenges are bound to result and they may include those in the Balearics, where there was the recent incentive scheme which now turns out to be all but worthless. It is a situation that has come about because of the government's desperate need to cut the tariff deficit, one that it, and not consumers, caused and because of governmental idealism that wished to use an energy supply that is available in such abundance. The sun always shines except when the government decrees that it shouldn't. Utter madness.
Any comments to andrew@thealcudiaguide.com please.
Wednesday, May 22, 2013
Tax Denial And Spanish Mistrust
The European Commission estimates that tax evasion in the European Union amounts to 864 billion euros. That's quite a lot of money. I'm unsure if this is annually, though if it is, then it is even more than simply quite a lot of money. To whatever period of time it refers, a conclusion that is drawn is that it isn't only the banana-republic Club Med countries that are awash with tax fraud and black money, so also are those countries which protest that they play by the rules and which have been at the heart of the European project pretty much from the days of iron and steel. Take Belgium, for example. Its percentage of hidden economy is said to be equivalent to 21.9% of the whole economy and amounts to 33.6 billion euros; Spain's is only fractionally higher, at 22.5%, though the amount in real terms is significantly greater - 72.7 billion.
This massive amount of tax evasion has only comparatively little to do with ordinary taxpayers (or non-taxpayers). It is evasion that is made primarily by large companies, the multinationals to which fiscal blind eyes have been turned in return for the benefits they bring in terms of employment and general economic welfare. They do bring employment, but the employees are hit for tax, while they as employers siphon their riches away in tax havens or through complex organisational structures. It is the large companies, as well as certain wealthy individuals, who are the haves of the tax system. They have all the benefits they can find, while the have-nots are everyone else, the hoi polloi who carry the tax burden. Or attempt not to carry the burden.
In Spain, the generally held view is that everyone evades tax or tries to avoid it. There is a distinction between evade and avoid. The former is considered illegal, the latter is considered to be creative tax accounting. Whichever verb or explanation one prefers, the view persists nevertheless; the Spanish are a nation of tax deniers and this denial is a national pastime that is rivalled only by football.
Despite having spent some years in Mallorca and having acquired a moderate feel for local culture, I remain gobsmacked at the endemic nature of tax denial. But when one looks around and sees the level of evasion, the level of corruption and the level therefore of fraud which is perpetrated by companies, certain prominent businesspeople and also politicians, then is it any wonder?
It was recently suggested that, although the submerged economy is as great as it is in Spain (and this submergence clearly does involve a very much wider population than tax-evading companies and corrupt politicians), if it weren't for this black economy, there would by now have been riots on the streets. It is an alarming notion. If the country were to operate properly in tax terms, it wouldn't get its economy in order, it would descend into anarchy.
I know full well how many companies operate, especially those which are larger than just the "mom-and-pop" concerns. The government knows full. Everyone knows full well. Certain tax burdens - social security payments most obviously, as they are ludicrously burdensome - bring with them evasion. Which means part black.
While other countries, even apparently less corrupt ones like Belgium, have such high levels of evasion, in Spain, the tax denial that is widespread throughout the economy is predicated, or so it seems to me, on a societal mistrust. Institutions, be they government in their different arms or the law, are set against the general public. Law-breaking is institutionalised insofar as it forms a key element of public administration's financial planning. Town halls, as an example, make a thing of revenues they can expect to derive from fines.
Such an expectation, though, is indicative of this institutionalised law-breaking. It may be a product of history, but it breeds what you have, the equally institutionalised mistrust between citizens and agents of the state. But mistrust can go only so far. Having created an atmosphere of extreme them and us, Spanish officialdom knows that it could tip the balance were it to reinforce this mistrust, e.g. by doing all within its power to eradicate the submerged economy; the suggestion that the black economy is preventing civil unrest may be right.
Tax-evading companies and high-profile individuals are one thing, the man in the street is quite another. The Spanish people haven't - yet - risen up against austerity and stormed the Bastille of corrupt business, government and the über-wealthy, because of the complicit nature of the tax-denial game. But it is no way to organise a society. Civic duty comes in different forms, and one of them is paying dues. This civic duty is not returned in full, however, because the masters of the citizenship have no trust in their citizens. And the feeling is entirely mutual.
Any comments to andrew@thealcudiaguide.com please.
This massive amount of tax evasion has only comparatively little to do with ordinary taxpayers (or non-taxpayers). It is evasion that is made primarily by large companies, the multinationals to which fiscal blind eyes have been turned in return for the benefits they bring in terms of employment and general economic welfare. They do bring employment, but the employees are hit for tax, while they as employers siphon their riches away in tax havens or through complex organisational structures. It is the large companies, as well as certain wealthy individuals, who are the haves of the tax system. They have all the benefits they can find, while the have-nots are everyone else, the hoi polloi who carry the tax burden. Or attempt not to carry the burden.
In Spain, the generally held view is that everyone evades tax or tries to avoid it. There is a distinction between evade and avoid. The former is considered illegal, the latter is considered to be creative tax accounting. Whichever verb or explanation one prefers, the view persists nevertheless; the Spanish are a nation of tax deniers and this denial is a national pastime that is rivalled only by football.
Despite having spent some years in Mallorca and having acquired a moderate feel for local culture, I remain gobsmacked at the endemic nature of tax denial. But when one looks around and sees the level of evasion, the level of corruption and the level therefore of fraud which is perpetrated by companies, certain prominent businesspeople and also politicians, then is it any wonder?
It was recently suggested that, although the submerged economy is as great as it is in Spain (and this submergence clearly does involve a very much wider population than tax-evading companies and corrupt politicians), if it weren't for this black economy, there would by now have been riots on the streets. It is an alarming notion. If the country were to operate properly in tax terms, it wouldn't get its economy in order, it would descend into anarchy.
I know full well how many companies operate, especially those which are larger than just the "mom-and-pop" concerns. The government knows full. Everyone knows full well. Certain tax burdens - social security payments most obviously, as they are ludicrously burdensome - bring with them evasion. Which means part black.
While other countries, even apparently less corrupt ones like Belgium, have such high levels of evasion, in Spain, the tax denial that is widespread throughout the economy is predicated, or so it seems to me, on a societal mistrust. Institutions, be they government in their different arms or the law, are set against the general public. Law-breaking is institutionalised insofar as it forms a key element of public administration's financial planning. Town halls, as an example, make a thing of revenues they can expect to derive from fines.
Such an expectation, though, is indicative of this institutionalised law-breaking. It may be a product of history, but it breeds what you have, the equally institutionalised mistrust between citizens and agents of the state. But mistrust can go only so far. Having created an atmosphere of extreme them and us, Spanish officialdom knows that it could tip the balance were it to reinforce this mistrust, e.g. by doing all within its power to eradicate the submerged economy; the suggestion that the black economy is preventing civil unrest may be right.
Tax-evading companies and high-profile individuals are one thing, the man in the street is quite another. The Spanish people haven't - yet - risen up against austerity and stormed the Bastille of corrupt business, government and the über-wealthy, because of the complicit nature of the tax-denial game. But it is no way to organise a society. Civic duty comes in different forms, and one of them is paying dues. This civic duty is not returned in full, however, because the masters of the citizenship have no trust in their citizens. And the feeling is entirely mutual.
Any comments to andrew@thealcudiaguide.com please.
Sunday, July 01, 2012
MALLORCA TODAY - Pollensa calls for scrapping of wildlife refuge tax
Pollensa town hall has agreed unanimously to call on the Council of Mallorca to remove a tax by which so-called wildlife refuges are registered as refuges and are therefore areas where hunting is prohibited so as to protect the wildlife. The town hall considers the tax to be unjust and discriminatory.
See more: Diario de Mallorca
See more: Diario de Mallorca
Tuesday, April 10, 2012
Conversion Rates: Town halls and hotels
The marathon of consultation and proposed amendments to the new tourism law in the Balearics is about to enter the stadium and take the last lap prior to its final presentation to the regional parliament at the end of this month. Since the start of December, every self-interested party and ones that are more altruistic have had their say, whether officially or unofficially.
The most significant movement by minister Carlos Delgado has concerned the say-so of local authorities - the island councils and the town halls - when it comes to proposed changes of use to existing hotel stock. The local authorities got into a fair old lather when they realised that a major reason for their existence - the approval or rejection of urban planning requests - was threatened by a government inclined to do the signing-off themselves.
The reasons for the local authorities having become so exercised about this possibility were obvious. They do have responsibilities for planning and they do, or so they would argue, have a better understanding as to what a change of use, be it to residential or co-participation (i.e. condohotels), would have on local areas.
A fear has been that the government, were planning left to it alone, would unleash a free-for-all of virtual deregulation, hence the objections of organisations such as the architects college in the Balearics and opposition political parties that this new urban planning would send the islands back to the bad old days of the sixties. Has this fear been overstated? Despite the go-ahead for new projects in Capdepera, Campos and Magalluf (all in theory earmarked for some years), the government has made it clear that it does not envisage massive new coastal construction; work under the provisions of the new law would be confined to conversion and this alone. Or would it?
Ultimately though, the objections of the town halls have been founded on their own self-interests, ones that do not, at first glance, appear to help in stripping out the sorts of delays and bureaucracy in planning requests that the government was hoping would be a consequence of centralised decision-making. The government has bowed to local authority pressure because on this issue it matters to town halls, many with Partido Popular mayors, that they hold onto their power. The government may otherwise have found itself with a real revolt on its hands from the party membership.
The law, as it now appears to be drafted, will give town halls the final say as to plans for hotel conversion. So will this mean that such plans are likely to be blocked or delayed by unco-operative local authorities? Not necessarily. Indeed, the government has been pretty crafty. Any conversion work is going to come with a 5% tax and this tax will end up in town hall coffers. A nice little earner for cash-strapped municipalities, and one that will have them salivating at the prospect and making pretty damn sure that the stamps have adequate rubber and are immediately to hand. Badly needed tax revenues can speed up even the most lethargic of public bodies.
There is, however, an unknown in the provision for conversion of use. It may become clearer once the bill is finally published, but changing a hotel to residential use means a loss of tourism offer. This much is obvious, but it has a planning dimension, namely that within municipalities there is a set amount of land that is designated as being for this tourism offer, i.e. it is accommodation or some other facility expressly with tourism in mind. Take some of this accommodation away, make it residential and what happens to that percentage which can be for tourism?
This is one reason why the government's insistence that it is not contemplating new hotel construction over and above the projects that are known about might not be all it seems. It is not as though it hasn't been, how can one put it, relaxed about other planning matters, such as regularising urbanisations previously considered illegal or giving the green light to projects that had been blocked, albeit that to have kept them blocked would have meant shelling out a whole load of compensation.
The furore over the hotel development near Es Trenc has given rise to further fears of coastal building deregulation, but the Es Trenc project is a specific case, one that will benefit an area of Mallorca underdeveloped in tourism terms. If the government does in fact end up permitting new construction within existing tourism centres, would this be such a bad thing? But it will still depend on whether local authorities agree. What's the tax revenue from new construction?
Any comments to andrew@thealcudiaguide.com please.
The most significant movement by minister Carlos Delgado has concerned the say-so of local authorities - the island councils and the town halls - when it comes to proposed changes of use to existing hotel stock. The local authorities got into a fair old lather when they realised that a major reason for their existence - the approval or rejection of urban planning requests - was threatened by a government inclined to do the signing-off themselves.
The reasons for the local authorities having become so exercised about this possibility were obvious. They do have responsibilities for planning and they do, or so they would argue, have a better understanding as to what a change of use, be it to residential or co-participation (i.e. condohotels), would have on local areas.
A fear has been that the government, were planning left to it alone, would unleash a free-for-all of virtual deregulation, hence the objections of organisations such as the architects college in the Balearics and opposition political parties that this new urban planning would send the islands back to the bad old days of the sixties. Has this fear been overstated? Despite the go-ahead for new projects in Capdepera, Campos and Magalluf (all in theory earmarked for some years), the government has made it clear that it does not envisage massive new coastal construction; work under the provisions of the new law would be confined to conversion and this alone. Or would it?
Ultimately though, the objections of the town halls have been founded on their own self-interests, ones that do not, at first glance, appear to help in stripping out the sorts of delays and bureaucracy in planning requests that the government was hoping would be a consequence of centralised decision-making. The government has bowed to local authority pressure because on this issue it matters to town halls, many with Partido Popular mayors, that they hold onto their power. The government may otherwise have found itself with a real revolt on its hands from the party membership.
The law, as it now appears to be drafted, will give town halls the final say as to plans for hotel conversion. So will this mean that such plans are likely to be blocked or delayed by unco-operative local authorities? Not necessarily. Indeed, the government has been pretty crafty. Any conversion work is going to come with a 5% tax and this tax will end up in town hall coffers. A nice little earner for cash-strapped municipalities, and one that will have them salivating at the prospect and making pretty damn sure that the stamps have adequate rubber and are immediately to hand. Badly needed tax revenues can speed up even the most lethargic of public bodies.
There is, however, an unknown in the provision for conversion of use. It may become clearer once the bill is finally published, but changing a hotel to residential use means a loss of tourism offer. This much is obvious, but it has a planning dimension, namely that within municipalities there is a set amount of land that is designated as being for this tourism offer, i.e. it is accommodation or some other facility expressly with tourism in mind. Take some of this accommodation away, make it residential and what happens to that percentage which can be for tourism?
This is one reason why the government's insistence that it is not contemplating new hotel construction over and above the projects that are known about might not be all it seems. It is not as though it hasn't been, how can one put it, relaxed about other planning matters, such as regularising urbanisations previously considered illegal or giving the green light to projects that had been blocked, albeit that to have kept them blocked would have meant shelling out a whole load of compensation.
The furore over the hotel development near Es Trenc has given rise to further fears of coastal building deregulation, but the Es Trenc project is a specific case, one that will benefit an area of Mallorca underdeveloped in tourism terms. If the government does in fact end up permitting new construction within existing tourism centres, would this be such a bad thing? But it will still depend on whether local authorities agree. What's the tax revenue from new construction?
Any comments to andrew@thealcudiaguide.com please.
Saturday, February 25, 2012
PR Disaster: Calvia's tiquetero tax
Calvia town hall is to permit "tiqueteros" once more. It hasn't decided exactly what the new ordinance governing the PRs will entail, but it has already decided what it is going to cost. Going to cost bars, restaurants and clubs, that is. The town hall is licking its lips at the prospect of 1.2 million euros finding their way into the municipal coffers, over a third of them in the form of fines, as a consequence of the PRs returning to the streets of Magalluf and other resorts and of their employers having to pay the town hall for the privilege.
Depending on the size of establishment and therefore the number of PRs that will be allowed, a bar owner could find him or herself having to fork out up to 3,500 euros a week.
For larger places, the cost of one employee could be as much as 350 euros more per week. This is because larger establishments will be obliged to fork out 50 euros a day (and they would be allowed to employ a maximum of ten PRs). Smaller places, i.e. less than one hundred square metres in size, will have to pay 30 euros a day but can only employ one PR.
To the onus of the tax (and this is the only way it can be described) is added an engineering of the business process. Smaller bars might wish to employ more PRs, so why shouldn't they be allowed to? What is the obsession with 100 square metres (or 200, another level of tax determination?
Over and above the arbitrariness, there is the question as to how such a tax can be justified, as it is a tax on marketing. The town hall's response would probably be along the lines of the fact that a PR occupies space owned by the town that is on the "public way". It is the same sort of principle as is applied to terraces which encroach onto the public way.
Up to a point, one can understand this, but where PRs are concerned, to be allowing them and then to be charging for them is a case of giving with one hand and taking with the other. But what if PRs were to be based only on a bar's property? What if they never moved? This would be unlikely, but were it to be so, then how could the town hall justify the tax? Only if the town's property is being used, can it feel safe in levying such a charge.
While regulating what businesses do is a legitimate responsibility of local authorities, too often bars appear to bear the brunt of petty and heavy-handed regulation. This is symptomatic of a culture in which business often appears to be misunderstood or simply exploited. There is a them-and-us culture, one exacerbated by a town hall mindset in which revenue calculations are arrived at with fines having been factored in. Town halls might be right to think like this, but it doesn't exactly make for an atmosphere in which all sectors of local resorts are co-operating for the greater good.
But, aside from the tax, what of the return of the PRs? Plenty of businesses have argued that they have suffered because they can't employ them (well, not legitimately). Perhaps so, but one reason why they were banned and why in other resorts they were confined to the premises and not meant to be patrolling the streets, was that there were so many complaints about harassment.
The town hall doubtless has a list of rules that it will unfurl to cover how PRs should operate, and doubtless they will be ignored. Allowing the return of PRs is one thing, making bars pay a tax for them is another. Calvia is making a rod for its own back. A bar owner who is obliged to spend as much as is being envisaged will want to make damn sure that he or she gets a return. And this is likely to mean a return to harassment of passers-by.
You can already begin to imagine how it's going to be. The local police will be spending all their time under instruction from the town hall to go in search of PRs acting inappropriately or without the tax having been paid so that the town hall can say it is keeping a lid on things and make a few more bob from fines. Meanwhile, other complaints that surface in the tourism season in resorts such as Magalluf will go unattended.
They're bringing back the PRs, but they're likely to bring about a PR disaster as well. Just wait for the internet to get clogged up with tourists moaning about the PRs.
Any comments to andrew@thealcudiaguide.com please.
Depending on the size of establishment and therefore the number of PRs that will be allowed, a bar owner could find him or herself having to fork out up to 3,500 euros a week.
For larger places, the cost of one employee could be as much as 350 euros more per week. This is because larger establishments will be obliged to fork out 50 euros a day (and they would be allowed to employ a maximum of ten PRs). Smaller places, i.e. less than one hundred square metres in size, will have to pay 30 euros a day but can only employ one PR.
To the onus of the tax (and this is the only way it can be described) is added an engineering of the business process. Smaller bars might wish to employ more PRs, so why shouldn't they be allowed to? What is the obsession with 100 square metres (or 200, another level of tax determination?
Over and above the arbitrariness, there is the question as to how such a tax can be justified, as it is a tax on marketing. The town hall's response would probably be along the lines of the fact that a PR occupies space owned by the town that is on the "public way". It is the same sort of principle as is applied to terraces which encroach onto the public way.
Up to a point, one can understand this, but where PRs are concerned, to be allowing them and then to be charging for them is a case of giving with one hand and taking with the other. But what if PRs were to be based only on a bar's property? What if they never moved? This would be unlikely, but were it to be so, then how could the town hall justify the tax? Only if the town's property is being used, can it feel safe in levying such a charge.
While regulating what businesses do is a legitimate responsibility of local authorities, too often bars appear to bear the brunt of petty and heavy-handed regulation. This is symptomatic of a culture in which business often appears to be misunderstood or simply exploited. There is a them-and-us culture, one exacerbated by a town hall mindset in which revenue calculations are arrived at with fines having been factored in. Town halls might be right to think like this, but it doesn't exactly make for an atmosphere in which all sectors of local resorts are co-operating for the greater good.
But, aside from the tax, what of the return of the PRs? Plenty of businesses have argued that they have suffered because they can't employ them (well, not legitimately). Perhaps so, but one reason why they were banned and why in other resorts they were confined to the premises and not meant to be patrolling the streets, was that there were so many complaints about harassment.
The town hall doubtless has a list of rules that it will unfurl to cover how PRs should operate, and doubtless they will be ignored. Allowing the return of PRs is one thing, making bars pay a tax for them is another. Calvia is making a rod for its own back. A bar owner who is obliged to spend as much as is being envisaged will want to make damn sure that he or she gets a return. And this is likely to mean a return to harassment of passers-by.
You can already begin to imagine how it's going to be. The local police will be spending all their time under instruction from the town hall to go in search of PRs acting inappropriately or without the tax having been paid so that the town hall can say it is keeping a lid on things and make a few more bob from fines. Meanwhile, other complaints that surface in the tourism season in resorts such as Magalluf will go unattended.
They're bringing back the PRs, but they're likely to bring about a PR disaster as well. Just wait for the internet to get clogged up with tourists moaning about the PRs.
Any comments to andrew@thealcudiaguide.com please.
Friday, February 24, 2012
MALLORCA TODAY - Calvia bars will have to pay tax for PRs
Calvia town hall, in the process of approving anew the permission for bars and other establishments to publicise themselves through "tiqueteros" (commonly referred to as PRs), is to also introduce a tax whereby the businesses would have to pay between 30 and 50 euros a day per PR. Calvia includes the resorts of Magalluf, Santa Ponsa and Palmanova.
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