B
-3-
of chance etc.
7. But there are three other factors behind the urgent need for Andorra to raise new revenue locally:-
(a) Investment to smooth away the uglier effects of helter- skelter commercialization, and speculative development of residential accommodation, which threatens to destroy the image of a tranquil mountain paradise on which its future hopes for a better quality of tourist depends;
(b) paying for the new ministries, which are already being criticized as lavish and a feather bed for young Andorrans with higher educational qualifications but no taste for the commerce of their fathers;
(c) the bills from last autumn's disastrous floods;
the search for such new revenue has produced a political crisis for Sr. Ribas.
8.
Traditionally, Andorra's income has almost entirely come from small taxes on imported goods, not on services or individuals. Andorra has several thousand foreign residents as a virtually tax free haven, attracted by the cheaper services such as sales of land and construction. But the representative government is essentially composed of those very Andorrans who have been responsible for, and profited greatly from, speculation in land and property for the foreign residents' needs and imports for the cheaper end of tourism. Sr. Ribas, seen as representing these sectors, has had great difficulty in working out with the Andorran Parliament a package of new taxes. This finally led to his seeking a vote of confidence in his government which was carried only by 12 votes against 8 and 7 abstentions i.e. a minority of the Consell General and to bitter attacks on his proposals by the Andorran newspaper which interprets the vote as reluctance to throw out the government just now, but in no way approval of his tax proposition which would have been defeated. Although I have not an official text of the proposed new measures, which are not yet into effect, their basic line is that banks will be required to pay 0.25% of their deposits to the Principality, insurance companies 0.5% of their annual premiums, and tourists a graduated tax ranging from 50 to 100 pesetas on the cost of their hotel rooms. We shall be reporting the details to DOT via the EIS system. Ribas' critics, with the implication that the trading barons in Andorra are looking only after themselves, suggest an alternative package, involving taxes on building and commercial companies, further taxes on petrol and the stopping of the further destruction of the country side with new ski resorts, whose infastructure will be a burden on the exchequer, a significant reduction of posts in government, taxes on tobacco manufacture in Andorra (Sr. Ribas and family are one of the leaders in the Andorran tobacco industry, making Winston cigarettes under license), and a tax on gambling machines in bars and elsewhere.
19. All
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