Spain May Raise Income Tax Again, Reduce Pensions, El Pais Says

Spain may raise income tax again and cut expenditure on pensions in order to meet its budget deficit target and avert a bailout, El Pais reported, citing unidentified people in the government.

Government tax revenue, needed to reduce Spain’s deficit to 6.3 percent of gross domestic product by year end, has fallen despite increases in value added tax and personal income tax earlier this year, El Pais said.

If the decline continues the government will raise income tax again and break an electoral pledge not to reduce pensions, the newspaper said, adding that Budget Minister Cristobal Montoro will present the latest data on tax collections in September.

To contact the reporter on this story: Sharon Smyth in Madrid at ssmyth2@bloomberg.net

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net

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