Spain announces plans to cut corporate tax, boost competitiveness

Prime Minister Mariano Rajoy on Sunday announced a new stimulus plan to boost Spain's competitiveness, including 6.3 billion euros ($8.6 billion) of investments and a cut in corporate tax.

"Next Friday, the government will present a package of measures to increase competitiveness and productivity," Rajoy said.

"The plan will include investments totalling 6.3 billion euros, of which 2.67 billion will come from the private sector and 3.63 billion from the public sector," he added, accompanied by European Commission vice president Joaquin Almunia and former Italian leader Enrico Letta.

Corporate tax rates will also be lowered from 30 percent to 25 percent, following advice from the International Monetary Fund in a report released last week.

He also ruled out any increase in Spain's 21-percent value-added tax rate, saying: "We will not touch the tax reforms that we approved in June."

Rajoy's announcement comes after the IMF on Tuesday declared that "Spain has turned the corner" in its economic recovery, hailing a return to growth in the eurozone's fourth-largest economy.

Spain last year made a weak exit from its second recession in five years after the 2008 property crash destroyed millions of jobs, flooded the nation in debt and forced the country's banks to seek a 41.3 billion-euro bailout.

The country's unemployment rate of nearly 26 percent is still one of the highest in the developed world and many working-age Spaniards are either giving up looking for a job or leaving the country in search of work, official data show.