Spain to boost housing, raise $7.2 billion

MADRID (AP) - The Spanish government is cutting a key tax rate in an attempt to boost the country's ailing construction sector and has announced plans to raise euro5 billion ($7.2 billion) as it tries to get a grip on its borrowings.

Government spokesman Jose Blanco said Friday value added sales tax on new houses would be cut from 8 percent to 4 percent until the end of the year to help clear excess stock of unsold houses.

The Cabinet is also planning to raise euro2.5 billion by obliging the country's largest companies with turnover exceeding euro20 million annually to pay taxes ahead of schedule until 2013. Another euro2.5 billion will come from reducing drug subsidy costs for regional governments by promoting generic medicines. (Copyright 2011 by The Associated Press. All Rights Reserved.)

Create a More Connected Minnesota

MPR News is your trusted resource for the news you need. With your support, MPR News brings accessible, courageous journalism and authentic conversation to everyone - free of paywalls and barriers. Your gift makes a difference.