I have opened this post to find out what working or non working expats with or without businesses think of the increase of IVA from 16% to 18% in Spain planned for this July.

- If you have a business how will you adjust? (Many Spanish companies have admitted that they are going to absorb the 2% increase as a loss, not to put their prices up)

- What do you think about it? (Some political parties warn that the VAT/IVA increase will hurt the consumer)

- Will the black market and Hacienda tax office frauds increase?

I think when this happened in the UK a lot of big chains were able to make a big PR song and dance about how they were nobly absorbing the increase and not passing the burden on to their customers.. whilst quietly making savings and adjustments in other areas (possibly at the expense of suppliers), whereas small local retail outlets find it much harder to suck up a cost like that as they dont have the buying/negotiating power with suppliers that a big chain does.  And for them 2% could be the difference between surviving the recession or not.

Here I think it won’t be that different, except there will be less leaping on the marketing bandwagon to make out they are championing the consumer cause, as there has been throughout the recession…

What the end impact on consumers will be I have no idea, one way or another we’re all going to have to pay to rescue our bankrupt economies,

BDPx