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Regions Face Double Payout over Wealth Tax Confusion

Sun 18th Sep 2011

Further confusion surrounding the issue of wealth tax came to light over the course of this weekend.

The Wealth tax, which will go a final vote next week, was originally abolished in 2008 in an attempt to stimulate the economy as the country behan a slide towards recession.

As a result of this the regional government, who previously collected the taxes, lost revenue and were compensated for this by Central Government.

However, now that the tax has been reintroduced the regions will still be able to collect this tax as before, but a glitch in the legal process means that they will also be able to claim the compensation from central government from the previous tax being abolished.

The problem is due to the fact that the law stating that the regions must be paid compensation is a much higher Royal Decree, whereas the measure reintroducing the tax can not over-ride it.

It is proposed that the tax will apply to net worth above 700'000 Euros, and affect around 160,000 people raising 2 billion Euros in revenue.

Economy Minister, Elena Salgado commented: "this does not seem reasonable - but there's no way around it. With a decree, there is nothing you can do to avoid it," she said.

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