Monday, 1 July 2013

Booze & backy up, electricity too - but no council tax increase

SPAIN Taxes on tobacco and alcohol went up on Saturday, and electricity rises by 1.2% as from tomorrow, July 1. A pack of cigarettes now costs an average of €0.15 more and all alcohol except wine and beer, is up by about 10%. The government argues that the price of tobacco and alcohol is among the lowest in the EU (they don't mention low wages or unemployment, though). The levy on tobacco will be most noticeable on roll-up tobacco, to which many smokers unable to give up the habit turned because it is cheaper than ready-made cigarettes. Some €400 million is expected to be raised by these increases by the end of the year, and some €700m in 2014. Electricity, on the other hand>>>
is due to rise by 1.2% as from July 1, though please do not ask how the convoluted system works - something we have been unable to decipher to any level of comprehensive for a number of years. Both the government and the suppliers agree that the tariffs being charged do not cover the costs of supplying - which does not explain why the companies such as Endesa, Iberdrola and Fenosa, to name but three of the biggest, keep showing profits. (See a list of suppliers here.)

In any case, this will be the second time this year the cost of electricity goes up, following that of January, although there was a decrease (yes, you read it right) of 6% in March.

Another tax approved at Friday's cabinet meeting, is one on the kind of gas used in air conditioning units and fridges, among other things. But this will not be in place until 2014.

One of the taxes that had been expected to take an increase was the council tax, or IBI (Impuesto de Bienes Inmuebles), but this has been delayed until 2015.

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