Manilva Town Hall is working on a new tax ordinance that will establish a charge for developers carrying out urban development projects in the municipality. The governing team intends to include the proposal in next year’s budget, and it raises questions about its possible consequences for the local economy and the appeal of Manilva as a destination for new investment.
According to the Town Hall itself, the mayor, Mario Jiménez, the councillor for Urban Planning and Finance, Juan Carlos Morejón, and municipal technicians have held a meeting to address this initiative, the aim of which is that those who invest in Manilva also contribute financially to the development of the municipality.
The local government’s argument is that the planning instruments needed to push forward certain projects originate with the Town Hall itself and that developers should therefore help finance the public resources and services provided to residents. With this new charge, the Town Hall intends to increase its revenue and strengthen municipal services.
Discouraging investors from coming to the town
Manilva competes with other municipalities on the Costa del Sol to attract business, urban development and tourism projects. In a climate where other municipalities are trying to make investment as easy as possible within their own boundaries, any new cost added to developers’ activity may influence their decisions when choosing where to carry out their projects.
If the economic or administrative conditions prove less attractive than those of other towns, there is a risk that certain investments will end up moving to neighbouring municipalities where they find greater facilities or more favourable taxation.
And the consequences of reduced investment would not be limited to the construction sector or the developers themselves. Every sizeable project generates a chain of economic activity across a large number of local businesses, reaching workers, self-employed people, auxiliary firms, suppliers, hauliers, hospitality, shops and numerous professional services.
In other words, an investment that does not come to Manilva can also mean jobs that are not created, contracts that are not generated and economic activity that no longer benefits local businesses.
The balance between raising revenue and facilitating economic activity
The issue should not be approached solely from the perspective of earning more money for the Town Hall’s coffers; the impact this measure may have on the shutdown of many local businesses that depend on these investments and the jobs they create must also be taken into account.
It is reasonable that those who carry out large projects contribute to the public costs they may generate, and that there be a proportionate return in the form of municipal services. But it is also important that any new tax burden be sufficiently justified, be transparent, translate into genuine infrastructure investment that benefits all residents and not end up becoming an obstacle for those who wish to make a business commitment to Manilva.
For the moment, the Town Hall has not publicly detailed the amount of the new charge, how it will be calculated, what type of projects it will affect or what criteria will be used to determine its application. Nor are there any estimates of the expected revenue or an analysis of the possible impact on the arrival of new investment.
The proposal is still being drawn up, so we will have to wait to see the content of the ordinance to assess its true scope.
The challenge for Manilva will be to strike a balance between obtaining more resources to improve public services and maintaining an attractive environment for private investment. Because increasing municipal revenue can be positive, but if achieving it ends up costing economic activity, job opportunities and business projects, the result could be very different from the one initially sought.
