The Spanish federal government fears that regional governments are not capable of contributing their part to the austerity program budget adjustment and, therefore, is looking for some wiggle room in their own funding. The budget target is 6% of the national GDP and consolidated among the central administration and regional and municipal governments.
Yesterday the Consejo de Ministros, the primary executive advisory group, adopted a method that is debatable considering that it is turning to major Spanish businesses that are anticipating higher taxes precisely at a time when funding is a hardship because there is not much credit available.
The government is forcing companies to pay upward of 2.5 billion euros in taxes. Those earning between 20 and 60 million euros are paying 59,000 euros and those earning more than 60 million, another 255,000 euros. Minister of the Economy Elena Salgado believes these levels are not exorbitant.
Yesterday she stressed that the companies? inability to get funding does not imply that the tax will be lowered. Nor does it mean that the system of deductions and expenses will change.
The government has adopted a formula for anchor the percentage used to calculate what partial payments big companies need to make in order to receive immediate financing. At this time, the percentage is calculated by multiplying the capital gains tax by 5/7.
