Spain energy tax to raise 6.8 billion euros annually -report

MADRID, July 12 (Reuters) - Spain's plans to tax the energy sector more, part of additional government efforts to slash its deficit announced on Wednesday, are expected to raise 6.8 billion euros ($8.3 billion) a year, S pa nish daily El Pais reported on Thursday.

The measure is part of a swathe of new spending cuts and tax hikes announced by Spain's Prime Minister Mariano Rajoy on Wednesday to slash 65 billion euros from the public deficit.

The government also said on Thursday it expects to save 6.3 billion euros a year from cuts to the public sector, including reducing the number of days off for public employees and getting rid of Christmas bonuses.

El Pais, citing a draft document from the industry ministry, said that the production of nuclear, hydroelectric and thermoelectric energy would be charged 4 percent, or 2 euros per MegaWatts billed to consumers.

Some other forms of energy would be charged at higher rates, including wind energy at 11 percent to raise 440 million euros and photovoltaic energy at 19 percent to generate 550 million euros.

On top of this first tax, nuclear and hydroelectric plants would pay an additional tax of 10 euros per megawatt and 15 euros per megawatt respectively, while hydrocarbons would face an additional surcharge of 4 cents a cubic metre, which is expected to raise 1.2 billion euros.

Spain will also make cuts to the sector, including slashing 50 million euros for energy transportation and 100 million euros for services outside the mainland, the report said.

Energy providers in Spain have consistently charged customers less for their services than the cost of producing energy, resulting in a 24 billion euro deficit in the industry that has been absorbed by the government.

Soria said the deficit could increase by a further 6.5 billion euros this year if no action was taken, meaning the new tax should cover it fully.

Rajoy, when he announced the new tax on Wednesday said that consumers would also have to shoulder part of the burden. ($1 = 0.8164 euros) (Reporting by Clare Kane; Editing by Julien Toyer and Susan Fenton)