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Spain's budget minister rules out corporation tax rise

·1 min read
Spain's Prime Minister Pedro Sanchez holds his first cabinet meeting in Madrid
Spain's Prime Minister Pedro Sanchez holds his first cabinet meeting in Madrid

BARCELONA (Reuters) - Spain will not raise corporation tax while its economy struggles to recover from the damage caused by the COVID-19 pandemic, the budget minister said in an interview published on Sunday.

In a country that has not managed to approve a full-year budget since 2016 because of a prolonged political paralysis, Spain's minority left-wing coalition government is currently trying to garner support from other parties to pass the 2021 spending plan.

A fresh surge in infections is compounding the hit to the economy, which is expected to shrink by more than 11% in the year as a whole, according to Spanish government estimates.

In an interview with La Vanguardia newspaper published on Sunday, budget minister Maria Jesus Montero discounted the possibility of hiking corporation tax in the midst of an economic downturn.

"But as for the profound reforms, which affect the production model, the structure (of the economy), such as corporation tax, it would be logical and reasonable for us to wait for this storm pass," she said.

(Reporting by Graham Keeley; Editing by Gareth Jones)