The cost of holidays to Spain will go up from next year following a rise in VAT on hotel accommodation.
Tour operators will absorb the tax increase for bookings already made for this summer, but prices for 2013 will reflect the rise from 8% to 10%, which comes into effect on August 1.
VAT on food and drink has also increased to 10% while the tax on other items such as sunglasses, cigarettes and clothing, has gone up by three percentage points to 21%.
Spain’s Prime Minister Mariano Rajoy confirmed the increase yesterday. It is part of a range of measures being taken by the government to help it meet its tough public deficit targets.
They were recommended by the European Commission and the International Monetary Fund, although they were not expected to take place until next year.
By Linsey McNeill
