The Costa Blanca relies on tourism and now shops and other businesses must decide if they are going to raise their prices becauseof IVA tax hikes.The IVA taxes go up in July and now travel associations have decided to take on the government about the increases.
At a meeting in Madrid it has been said that the government must be made aware of the grave consequences that these rises will have on the travel industry.The tourism industry accounts for 10% of the Gross National Product.It could force closure of many businesses as sales drop and add even more to the unemployed register.
Just over a year ago the sector employed 54,000 people but since then more than 6000 have lost their jobs.As the sales of package holidays drops even more then even more jobs will go.In some areas the IVA increase will not be passed on to the consumer.The owners of the clothing stores Zara and Massimo Dutti have made such a decision.They have opted to make savings in other areas of their businesses.Carrefour,the French owned hypermarket has also announced that it will not pass on the increases.Many on the Costa Blanca have still to decide what they are going to do.
