Sugary soft drinks are to be taxed for the first time in Spain as the Government looks to claw in eight billion extra euro next year to help balance the budget and to respond to European Commission demands to cut the country’s public deficit. Taxes on tobacco will rise to what the Government described as “conforming to European standards”, and there will also be a hike on alcohol taxes.  

Finance minister Cristóbal Montoro announced the budget plan to Parliament on Wednesday, which will overall bridge a gap of some 15 million euro, with a combination of increased economic growth, with the rest coming in from increased taxation. Montoro said that two billion euro would come from a combination of cigarette and alcohol tax levels going up plus the introduction of the sugar drink tax, though the exact effect on prices has not been declared. All fuel and energy taxation levels will stay at the current levels.

One billion euro is expected to be raised in a new move to stop fraud in the declaration of IVA, whilst five billion will be put into the government coffers via an increase in corporation tax. Despite the minority Partido Popular government not having enough votes to carry measures through in Congress, the budget plan has got the approval of the biggest opposition party, the socialist PSOE, despite threats in recent weeks that they would vote down the budget. The PP are also being backed by the centre Ciudadanos party.

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