To Pass $8.6 Billion Plan To Boost Jobs, Cut Taxes In
June: Prime Minister
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[May 31, 2014]
MADRID (Reuters) - Spain
will approve a 6.3 billion euro ($8.6 billion) plan next
week to create badly needed jobs and will cut the main
rate of corporate tax to 25 percent from 30 percent to
make companies more competitive, Prime Minister Mariano
Rajoy said on Saturday.
About one in four workers in Spain is unemployed, with the jobless
rate climbing to over 50 percent for people aged 25 or less. A
tentative economic recovery has yet to feed into jobs and better
living conditions for most Spaniards.
The tax announcement comes as the International Monetary Fund this
week asked Spain to increase tax revenues to protect its public
services and make further efforts to cut its budget deficit to
ensure a lasting economic recovery.
The jobs package is due to be passed by the government next Friday
and will include credit to small and medium-sized firms and an
investments targeting research and development, energy-saving,
transport and industrial production, Rajoy said at an event in
Sitges in northern Spain that was broadcast on Spanish television.
Measures to fix the public employment service will also be put
forward, he said.
Later in June, the government would approve a wide-ranging tax
reform, he said, including a cut in the corporate tax rate although
companies would enjoy fewer tax breaks.
"The general idea is to cut taxes. We want families to have more
money in their hands, boost consumption, increase the
competitiveness of the entire economy, step up savings and
contribute to creating jobs," Rajoy said.
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The government already approved earlier this year a cut in social
security contributions for companies creating jobs and Rajoy has
said the reform would also include a cut in income tax for middle-
and low-income taxpayers.
Spain's government forecasts that the country's ratio of public debt
to gross domestic product (GDP) will reach 99.5 percent by the end
of 2014, while the public deficit will remain high at 5.5 percent of
GDP.($1 = 0.7328 Euros)
(Reporting by Julien Toyer; Editing by Raissa Kasolowsky)
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