Changes Ahead

When we arrived in the fall of 2011 we heard of the economic crisis.  People all around talked of it, but in our "bubble" we didn't see a lot of it.  Tonight, however, as we took a final walk through the Plaza Mayor of Alcala (Hannah returns to the states tomorrow for college and we move to Illescas in a week) we saw first hand the results of the crisis.  Store after store had been boarded up and closed.  Even Burger King was closed!

Last week the government announced an increase in IVA (sales tax).  For many products it will now be 21%.  The country is in a financial crisis and needs to somehow generate extra income, and yet at the same time as a result of the crisis the citizens do not have the money to pay the extra tax.  The days ahead are going to be interesting.

Here is a glimpse at sales tax in Spain...

• Theater tickets, circus, bullfights, museums, attraction parks, etc... increased from 8% to 21% sales tax
• Health and Dental services... increased from 10% to 21%
• Hair Dresser or Manicurist... increased from 8% to 21%
• Clothes, footwear, tobacco, alcohol drinks... increased from 18% to 21%
• Flowers, bulbs, seeds.... increased from 10% to 21%
• Communications, real estate, and funeral fees... increased from 18% to 21%
• First Time Home Buyer Tax (previously if you were a first time home buyer you received a lower tax rate as an incentive to buy) - from 4% to 21%

All the new changes go into effect September 1.  The Spaniards around us are feeling this crunch (as well as us) and there is concern for what the days ahead hold - both for them individually and as a country.  Pray for the coming days!  The belief is that things will get much worse before they get better.  For many that is hard to imagine.