Montoro has angrily denied that he is planning another IVA tax rise in the next few months, as suggested by Expansión today.
He admitted that the IMF and the EU keep asking him to put IVA up, but said he’s not going to, because it isn’t necessary.
IVA has three tax bands in Spain, 4%, 10%, 21%. The suggestion was to change them to 4%, 13%, 23%. But Montoro, the Minister of the Economy, is refusing to do this, mainly because Spain will explode in a fireball of rage if he does.
Instead, he’s just going to quietly move everything he can from 10% to 21%, which will bring in more cash, won’t be so politically upsetting and shouldn’t cause too many riots.
He’s done this with all non-urgent medical products (moved from the 10% to 21% tax grouping), quite a few home products, entertainment and he’s got his eye on a number of other things.