Request for moratorium on proposed IVA increases

Employers and Unions in Andalucia have warned of the potential negative impact on tourism in the region as a result of the Government’s plans to increase IVA (VAT) in July.

The president of the Tourism Council of the Confederation of Businessmen in Andalucia (CEA), Miguel Sánchez, would like to see a moratorium on the tax hike for the tourist sector or even the application of the super-reduced rate of 4%.

The rate of IVA currently applied to the tourist sector is 7%, but this will rise to 8% in July 2010. The CEA argues that for three years now, companies in the tourist sector have been reducing prices to attract visitors and increasing IVA will only make them, and the region, less competitive and less attractive to tourists as it is the consumer, namely the tourist, who has to pay the higher price.

The CEA believes that the increase in IVA during an economic crisis will affect all forms of trade, not only the tourist sector, as it will reduce consumption.

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