Spanish government plans company, income tax cuts to compensate for sacrifices during crisis

MADRID – The Spanish government has approved plans to cut company and income taxes in 2015 and 2016 in a bid to boost spending and investment as the country tries to recover from a double-dip recession.

Finance Minister Cristobal Montoro said Friday it was time to recompense Spaniards for the efforts made during the economic crisis.

Montoro said workers would on average see their income tax bills drop by 12.5 per cent by 2016.

The average corporate tax rate will be reduced to 25 per cent from 30 per cent over the two years.

The government estimates the measures will put some 7.6 billion euros ($10.35 billion) into the economy.

The conservative government introduced widely unpopular income and value-added taxes after taking office in 2011 as part of emergency measures to reduce the swollen deficit.