In a significant change of direction for Spanish fiscal policy the government has announced a policy of shifting taxation from labour and company profits to environmental taxes with the intention of bringing Spanish green tax levels up to the EU average while stimulating the economy.
Economics minister Pedro Solbes confirmed in a speech on Thursday that the government will introduce legislation in early 2006 to reduce income and corporation tax. New or increased fuel, water and waste taxes are the areas most likely to provide compensating revenue.
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