Tax Increases Nov 2012


Xàbia Town Council intends to increase the tax rates for rubbish collection and vehicle taxes to cushion the loss of income of millions of euros following the cancelation of the 2005 catastro (property valuations).

The Town Hall executive will control spending, and will make it easier for taxpayers to organize the payment of taxes in instalments.
Xàbia. Tuesday, November 6, 2012. On Thursday at an extraordinary plenary session, Xàbia Town Council will discuss three ordinances amending taxes, following a session this morning of the Finance Committee whose report proposes increases to the rates of tax on rubbish collection, motor vehicles and an increase in the IBI tax rate from 0'95% to 1'13%. The mayor José Chulvi, and Councillor for Finance Oscar Anton, have put forward these "extraordinary" measures as part of the adjustment that has affected Xàbia Town Hall, following the court judgment cancelling the 2005 property valuations and reverting to the 1995 values. This court ruling leaves the town’s coffers in an "exceptional situation" of eight million euros less in tax revenue than had been forecast when the budgets for 2012 were approved, and a substantial part already spent or committed.

The councillor for finance, has stated that the Xàbia executive, in addition to controlling expenses to the maximum, and reducing spending in all departments, has squeezed every possibility to cushion the decline of income, through debt renegotiating, asking for help from other administrations, and increasing the incorporation of hundreds of homes, which it has been discovered had not previously been taxed.
However, the gap of 14 million euros over two years has proved insurmountable and the Council calculates ending the year with a deficit of 3.2 million, leaving the local government no alternative but to propose a rise in the rubbish collection tax, which until now was well below the average in the region and below the actual cost of the service because it was offset earlier by higher revenues in IBI.

With the modification, each household will pay 125 euros, whereas businesses will pay varying increases which will relate to the size of their premises. In the "vulnerable" sectors, to minimise the effect on them, small businesses which will be taxed as a house, as will the fishing cooperatives. Discounts of 40% of the rate will be maintained for pensioners and large families.

The tax on vehicles will still be below the average for the region: an average car will pay 44 to 57.8 euros, while larger engine vehicles will see the most increase in the rate.
Conscious of the effort being asked from our citizens, the tax office is working non-stop to introduce ​​new technologies to make it easier for taxpayers to meet their obligations, the mayor added. Therefore next year a pioneering personalised payment system will be introduced, to enable each taxpayer to decide how to distribute each payment of their total taxes throughout the year.

Also, local administration officials have pledged to match the effort required of citizens through savings, careful management, and a titanic effort to rethink the organization of the town so that services become cheaper, and the search for other sources income, which will not affect our citizens, and of course spending cuts.
Despite all these efforts, and even after these tax changes, overall the Town Hall will still raise less than in 2011, when the property valuations were based on the 2005 catastro. In total it is estimated that 21.5 million euros will be raised, whereas in 2011 it raised more than 25 million euros in tax revenue.
Therefore, next year we will continue an aggressive control of spending and implement staff cuts and cuts to current expenditure. There will be an average of 11% budget cuts in all departments, although some such as Social Services will retain their full budget, others like Fiestas will have the biggest cuts.

An extraordinary situation
The mayor, José Chulvi, has made clear that these tax rises relate to an “extraordinary situation” which has to be faced “responsibly" and has pointed out that, when it was possible, his government cut taxes last year, authorizing the largest reduction of IBI in recent years.
Mayor Chulvi has admitted that these tax increases are far from pleasant, and are a consequence of having to revive the outdated property valuation list of 1994, which allows such injustices whereby in some cases luxury beachfront homes pay less than apartments in the Pueblo or the Port.

In this regard, the mayor reiterated, "we have already requested a cadastral revision and hopefully in 2014 the 1994 valuations will be replaced by a realistic and fair valuation so that everyone will pay what they really should."

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