Spain announces tax cut plans

Spain has revealed plans for sweeping tax cuts to stimulate the economy and create new jobs in a nation still grappling with stubbornly high unemployment despite a return to growth. Prime Minister Mariano Rajoy’s government, which faces elections in 2015, said Spaniards should reap the reward for their sacrifices during a period of deficit-cutting austerity, which has prompted mass street protests. Spain’s economy, the fourth-largest in the eurozone, is slowly recovering after emerging from five years of stop-start recession prompted by a 2008 property crash, but unemployment remains at 26 per cent. The proposed reforms will be published for public consultation before a final version goes to parliament. The IMF last month called on Spain to overhaul its 21-per cent sales tax to gradually withdraw the reduced rates applied to items such as food, books, hotels and restaurants, according to AFP.