Europe

Europe

Spanish cabinet approves new measures to reduce deficit

20 August 2011 03:43 (UTC +04:00)

Baku-APA. The Spanish cabinet on Friday approved a series of new measures in a bid to revive the country’s sluggish economy and cut its budget deficit, APA reports quoting news.xinhuanet.com website.

Sales tax for the purchase of newly constructed homes will be cut from 8 percent down to 4 percent in order to stimulate Spain’s badly-hit construction sector, according to Information Minister Jose Blanco.

The temporary tax cut would last through till the end of the year.

Blanco explained in his habitual Friday press conference that the measure would help clear the backlog of new homes that had yet to be sold, allowing work to begin on new future constructions.

The government led by Prime Minister Jose Luis Rodriguez Zapatero also announced an increase in Corporate Tax, which is aimed at bringing 2.5 billion euros in additional revenue in 2011.

Around 4,000 companies billing over 20 million euros a year would be subject to the new measure.

Economy Minister Elena Salgado said the rate of the tax would be 24 percent for companies billing between 20-60 million euros a year, and 27 percent for those billing more.

Another decree aimed at cutting medical costs by forcing health authorities to buy generic drugs instead of more expensive branded treatments, a measure hoped to save another 2.5 billion euros this year, was also approved in Friday’s cabinet meeting.