Spain plans energy tax to bring in $3.5B

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NEW ENERGY TAX. From left to right: Spanish justice minister Alberto Ruiz-Gallardon, deputy primer minister Soraya Saez de Santamaria and industry minister Juan Manuel Soria. Photo from La Moncloa website

MADRID - Spain's government announced Friday, September 14 it would create new energy taxes to bring in 2.7 billion euros ($3.5 billion) for the nation's depleted coffers.

The draft legislation aims to curb energy spending that has grown over the years because of rising subsidies, Deputy Prime Minister Soraya Saenz de Santamaria told reporters after cabinet approved the measure.

Spain has accumulated a so-called power tariff deficit -- the difference between the actual cost of energy and what the consumer pays -- of 24 billion euros, mainly due to subsidies for renewable energy production.

The tax hike "is needed to meet our goals in terms of our public deficit but also to lower the tariff deficit and build an energy and electrical system that is solvent and sustainable," the deputy prime minister said.

Among the measures included in the draft legislation is a tax of 6.0 percent on all types of power generation and two new taxes on nuclear power.

One nuclear tax will be based on the amount of nuclear waste that a power company produces and another on the amount of waste that it stores.

The government aims to limit the increase in the power tariff deficit to a maximum of 1.5 billion euros this year compared to annual increases of around 5.0 billion euros in 2010 and 2011, Industry Minister Jose Manuel Soria said.

"From 2013 onwards there can be no more tariff deficit," he said.

Prime Minister Mariano Rajoy conservative government has raised taxes and made steep spending cuts since it took power in December to put the country's finances in order and avoid the need for a full-blown financial bailout.

Madrid has already accepted a eurozone rescue loan of up to 100 billion euros to save banks still reeling from a 2008 property market crash.

The government is committed to lowering Spain's deficit to 6.3 percent of output this year from 8.9 percent in 2011, the third-largest in the eurozone. - Agence France-Presse

Source: http://feedproxy.google.com/~r/rappler/~3/DuJUOXuqbnA/12455-spain-plans-energy-tax-to-bring-in-$3-5b

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