MALLORCA TODAY - Spanish rise in value added tax to take effect on 1 September

Initially the Spanish Government had signalled that the rises in IVA (value added tax) could take effect as early as today, then it was likely to be Sunday or Monday. Now it won't be until 1 September. As part of the increase, however, certain products, currently at the reduced 8% rate of IVA, will attract the new standard rate of 21% (up from 18%). These will include the likes of spectacles, funerals, hairdressers, cinema and even discos. The new reduced rate of 10% will still apply to tourism services, e.g. hotels, restaurants, transport, while the super-reduced rate of 4% will continue to apply without any increase to certain basic foodstuffs and books and newspapers. This super-reduced rate will, however, no longer apply, as from 2013, to house purchase, and this will rise to 10%.

Of other measures announced by the government, two are likely to threaten more industrial action - liberalisation of transport services and privatisation of ports and airports.