Their association president warns a huge rise in VAT will see many businesses close. / Sur
On the point of giving up. This is how many of Malaga province's 100,000 self-employed workers feel at the moment. Until now numerous small businesses or self-employed people have been, undoubtedly, driving the local economy. Last year 20,000 people joined the dole queue while in the first three months of this year there was an increase of 3,000 workers on the official register of the self-employed.
But the different associations which represent the self-employed are now warning that their workers are struggling to survive. They forecast a steep rise in small business closures (which already only last an average of one year as opposed to the previous five) as well as a shift to the black economy.
The latest package of austerity measures unveiled by the government has dealt two harsh blows to the self-employed. The first is the hike in IVA (VAT) rates and the second is the increase in IRPF (income tax) contributions. Added to existing problems already created for small businesses by the crisis, namely a lack of credit and a rise in bad debts, these latest financial moves are "the last straw", according to Juan Antonio García, president of Facemap (Federación de Autónomos, comerciantes y empresarios de Malaga y Provincia). Another organization which represents workers in this sector, ATA (Asociación de Trabajadores Autónomos) has calculated that from now every entrepreneur will have to pay 1,100 euros more each year in tax.
One of the issues that small businesses have to deal with, which will be hugely affected by the rise in IVA, is the fact that they are commonly obliged to pay this tax before their own invoices are paid. ATA say that since January self-employed workers have paid 390 million euros of IVA on work they haven't yet been paid for.
As the vice president of ATA, Rafael Amor, says "strangling self-employment is not the way to end the crisis".