Spain: The government plans to increase alcohol taxation
Spain’s minority government, headed by the Popular Party (PP), is meeting with the main opposition party, the Socialists, to negotiate the terms of the budget plan that the EU is expecting to see in the coming weeks.
The Spanish government explores its options for raising more revenue in 2017. The package is set to include taxes on tobacco and diesel fuel, as well as increasing taxation for alcohol and sugary drinks.
Projected additional revenue
The government calculates with additional €2 billion pouring into the state coffers through raised duties on tobacco and alcohol, and a new levy on sugary drinks. These types of taxes target what experts call “negative externalities,” or the costs suffered by a third party via consumption of taxed items, in this case because of detrimental effects on health.
The package of measures is set to receive the go-ahead by the Cabinet, together with the spending ceiling. This will allow authorities to start working out the regional budgets and deficit levels for next year. Spain must present a package of measures to the European Union by the beginning of December to meet demands to cut €5.5 billion to reduce the country’s structural deficit – debts the Spanish government believes it can avoid.