IMF: Spain should raise taxes to reduce deficit
16 June 2012 @ 18:17
Spain should raise taxes and cut government workers' pay to narrow its budget deficit, the International Monetary Fund said Friday.
The international lending group said Spain's deficit is likely to exceed estimates and the government should therefore consider several measures to boost tax revenue.
The IMF suggests the government increase in its value-added tax, or VAT, which is a type of sales tax. Spain should also eliminate a deduction on mortgage payments for first-time homebuyers, which was recently reintroduced, the report notes.
Spain's Prime Minister Mariano Rajoy has resisted increases in the VAT. The previous government boosted it to 18 percent in 2010, though it remains one of the lowest in Europe.
Read the full article at Bloomberg Business Week
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