Fri11282014

LAST_UPDATEFri, 28 Nov 2014 4pm

Rajoy Publishes Tax Returns Amid Kickbacks Scandal

MADRID: Spain’s prime minister published his tax returns yesterday in a bid to quell reports he and other conservative politicians received secret cash payments but the opposition said many questions remain unanswered.

The government’s website posted tax authority documents detailing Mariano Rajoy’s income and tax payments from the past ten years. His ruling People’s Party (PP) also revealed four years of financial accounts on Friday, in another attempt to put the matter to rest.

The scandal, centered on ledgers supposedly made by a former party treasurer, have cut support for the PP to the lowest level on record and pushed up borrowing costs just as it seemed Spain was getting to grips with a financial crisis that had raised questions about the future of the euro zone.

Former PP treasurer Luis Barcenas has described as fake handwritten ledger entries published on Jan 31 by El Pais newspaper purporting to show payments funded by construction firms made to PP leaders including Rajoy.

Rajoy has said the payments were not made and that the party is organizing an external audit into the affair.

The opposition Socialists said the published accounts of Rajoy and the PP did nothing to explain the Barcenas papers.

Socialist spokeswoman Soraya Rodriguez said Spaniards wanted more than Rajoy’s tax records.

“Spaniards are fed up of waiting for answers that never come,” she told journalists in Valladolid yesterday.

Cayo Lara of the United Left party said the publication of the accounts was meaningless as members of parliament have to declare their assets in any case.

The tax returns do not cover the first half of the period of entries in the ledgers published by El Pais, which run from 1990 to 2009.

In the last year of detailed returns published, for 2011, Rajoy earned more €400,000 (RM1.56 million) before tax. He paid €870,292 in tax over the period covered by the published accounts. His parliamentary salary was supplemented by investments in public debt and real estate, the government said.

Support for the PP fell to 24 per cent in a Metroscopia poll published on Feb 3, the lowest on record and barely more than half the support the party received when it won a landslide election victory in late 2011.

Spain, the euro zone’s fourth-largest economy, has been at the center of concerns about the future of the euro currency and was pushed to the brink of following Greece, Ireland and Portugal in asking for an international bail-out.

A pledge by the European Central Bank to act as a backstop for bets against peripheral euro zone countries has reduced borrowing costs, but Spain is still struggling with a deep recession and unemployment of 26 per cent.

The yield on Spain’s 10-year government bonds rose to almost 5.5 percent on Feb 6, up from 5.2 per cent on Jan 30, the day before El Pais published the alleged accounts.

Fitch affirmed Spain’s investment grade rating on Friday but warned that it could still downgrade the country’s sovereign bonds in coming months on worries about the economy and public debt levels.


- Reuters

http://www.reuters.com/article/idUSL5N0B91QV20130209