The veto on this amendment is difficult to explain and understand, since the government itself announced the introduction of the so-called ‘State Strategy for Cycling’ less than a year ago.
The bicycle unions, the industry and various actors that are part of the bicycle ecosystem have expressed their disappointment with the unilateral veto of the Ministry of Finance on their request to apply the reduced VAT rate to the purchase, rental and repair of bicycles. “Users and associations worked hard to ensure that an amendment to the general state budget could be passed in defense of bicycle use. It is absolutely disappointing that the government’s veto does not allow this issue, which is vital to society and national industry, not even to be debated in the Congress of Deputies,” he said.
Jesus Freiregeneral secretary of AMBE.
According to Freire himself, “representatives of the sector and cyclists have repeatedly informed the government of the need to take measures and apply specific incentives to promote the use of bicycles, which would only bring important benefits to mobility of our cities, in improving the health of citizens, in caring for our environment and in creating local employment”.
The veto on this amendment is difficult to explain and understand, as less than a year ago the government itself announced the implementation of the so-called ‘State Strategy for Cycling’ as a fundamental strategic pillar to address the challenges of mobility, health and climate change that Spanish society will face in the coming years. Moreover, the ‘strategy’ itself opened the door to fiscal measures to promote the bicycle, such as the application of a reduced VAT rate.
Laura Vergaramanager of the ConBici Association representing organizations in defense of the bicycle, confirms that “the initial disappointment turns into real concern when it is verified that since June 2021, when the state strategy for the bicycle was approved, the Ministry of Finance has not issued any specific fiscal incentive to promote the use of the bicycle as the best alternative for sustainable mobility, such as incorporating the bicycle into flexible remuneration mechanisms or laying down incentives for labor mobility in the Sustainable Mobility Act”.
In addition, it should be recalled that also at the end of last year the Council of Finance Ministers of the EU unanimously agreed (and with the positive vote of Spain) to include the sale, rental and repair of bicycles in Annex III of the VAT directive authorizing member states to apply a reduced VAT rate to these activities on the grounds of their contribution to the improvement of the environment and public health.
«It is incomprehensible», continues Laura Vergara, «that a year ago the government explicitly supported this measure within the European Union and now, with fuel and electricity prices at record highs, opposes its application in our country to help the bicycle will become the most efficient alternative, both to reduce energy demand and to reduce the impact on citizens’ wallets and contribute to the transformation of mobility in our cities”.
The representatives of both associations conclude that the VAT reduction on bicycles is currently fair and budgetary feasible. The increase in the average price of bicycles in recent years, driven by the increase in sales of electric bicycles, has led to significant growth in VAT collection, which has more than doubled. There is therefore more than enough margin to compensate for this disproportionate increase.
From an economic point of view, there is no doubt that the VAT reduction would have a positive effect on demand and compensate for part of the loss of direct tax revenue, in addition to the effect on complementary products related to cycling and not subject to up to a reduced VAT rate (clothing and footwear, protection and security elements, etc.).
Source: La Verdad
I am Ida Scott, a journalist and content author with a passion for uncovering the truth. I have been writing professionally for Today Times Live since 2020 and specialize in political news. My career began when I was just 17; I had already developed a knack for research and an eye for detail which made me stand out from my peers.
