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Government announces tax cuts for SMEs, end to 426 a month extra dole

Government announces tax cuts for SMEs, end to 426 a month extra dole

The Government is expected to approve on Friday in the Council of Ministers, new economic measures to overcome the economic crisis, among which is an end to the 426 euros a month additional dole for long-term unemployed, as was confirmed by the Prime Minister, José Luis Rodríguez Zapatero at a government control meeting today.

In brief:

  • The program of 426 euros a month for the long term unemployed whose right to other benefits have expired will end in February 2011.
  •  The tax base for companies that are taxed at the reduced rate extends to those making up to 300,000€ profit (40,000 small companies will benefit)
  • All companies will now get free membership of their local Chamber of Commerce
  • Part privitisation of AENA, the airports manager, and the National Lottery
  • New regulations for job placement and outsourcing companies

In response to a question from the opposition leader, Mariano Rajoy, on government assistance to small buisinesses (SMEs), Zapatero replied that “on Friday we will adopt a package of measures authorising a new tax cut on SME tax, corporate tax and reduced section taxes. ”

The reduction is to expand the tax base for companies that are taxed at the reduced rate, extending this from the current 120,000 euros to 300,000 profit.

As explained by the president, the plan will benefit 40,000 companies. The measures include eliminating the fee to the chambers of commerce for all businesses.

New regulations for job placement and outsourcing companies

In addition, the Government intends to adopt the regulation of private employment agencies to promote employment. The current regulations around outsourcing and job placement agencies means that few such companies exist in Spain, other than quasi-official government agencies. The new regulations will free up the sector mainly for “service employers,” said Zapatero.

As part of measures to reduce unemployment, the Government also plans to privatize a portion of National Lottery and Aena (the airport manager), which will involve private management by the concession system of Barajas and El Prat airports.

This last measure was announced several months ago. With the part privatization of AENA the Government expects more to obtain more than 9,000 million euros.