The Catalan Government and the four Provincial Councils give birth to Catalonia’s Tax Administration

Barcelona (ACN).- The day before the crucial meeting between the President of the Catalan Government, Artur Mas, and the Spanish Prime Minister, Mariano Rajoy, the formal ceremony to give birth to Catalonia’s Tax Administration has taken place in Barcelona. The Catalan Government and the existing four Provincial Councils, all run by the Centre-Right Catalan Nationalist Coalition (CiU), have created “the embryo” of Catalonia’s Treasury. They will merge existing structures, staff and resources to collect all the taxes at Catalan and local level, without incurring any extra cost. Currently the Provincial Councils raise the local taxes. The new body will create a network of one-stop branches. The creation of Catalonia’s Tax Administration follows the strategy already advanced by the Catalan President to create “state structures” and to get the fiscal sovereignty. The Catalan Treasury would be the main pillar of the new fiscal agreement between Catalonia and Spain proposed by CiU with the support of ERC and ICV-EUiA, by which this body would collect all the taxes from Catalan citizens and companies and later pay the Spanish Government for the services and investments received, and for a limited solidarity with the rest of Spain. Catalonia has been contributing with an average of 8.5% of its GDP each year since 1986 to pay for services and investments made in other parts of Spain. This represented an annual amount of €17 billion in 2011, an amount that Catalonia would like to reduce by half. Mas will present this proposal to Rajoy, who said today he will not accept it in the form of a specific fiscal agreement for Catalonia, as the Basque Country and Navarra already have. Mas answered Rajoy that “Catalonia will make its own way, whatever happens” with the new fiscal agreement proposal. He also underlined that while Catalan citizens demonstrate peacefully and democratically, and make a “positive and constructive proposal”, the Spanish State sends “threats” to Catalonia.

Rajoy will not accept a specific fiscal agreement for Catalonia

Eight days after the 1.5 million strong demonstration asking for Catalonia’s independence, the Spanish Prime Minister has talked about it for the first time. The Spanish PM said he will not accept a specific economic agreement between Catalonia and Spain, similar to what the Basque Country and Navarra already have. However, he has agreed to talk about reviewing the current fiscal redistribution scheme, although members of his party have been stating this is not a priority. Rajoy reaffirmed his commitment to defend the Spanish Constitution and make others to obey it. Therefore, as expected, Rajoy will refuse to talk not only about an eventual negotiated independence process, but also about a specific fiscal agreement between Spain and Catalonia, which has a GDP the size of Portugal. This is Rajoy’s first answer to the massive and peaceful demonstration in Barcelona, which was fuelled not only by the crisis but by the constant attacks to Catalonia’s self-government and language, and Spain’s non acceptance of its plurinational status. Rajoy has been eluding the assessment of the Catalan independence demonstration since it took place, on the evening of September 11^th. However, the Spanish PM was obliged to talk about it at the Government’s Control Session at the Spanish Parliament.

At the signature ceremony of the new Catalan Tax Administration, the President of the Catalan Government answered Rajoy. Mas stated that “Catalonia will make its own way whatever happens” with the fiscal agreement. Therefore, Catalonia will build its own Treasury, even if the Spanish Government initially disagrees, as this is the majority will of the Catalan citizens. In fact, the proposal for a new fiscal agreement between Catalonia and Spain has almost an 80% support among Catalan citizens. Mas insisted that he was “hoping that Rajoy will listen carefully and without prejudice” to the fiscal agreement proposal and the Catalan Government’s views of the current relationship between Catalonia and Spain, “considering that our proposal [for a fiscal agreement] is more a solution than a problem”. In addition, Mas underlined that while Catalan citizens demonstrate peacefully and democratically, and make a “positive and constructive proposal”, the Spanish State sends “threats” to Catalonia.

The “embryo” of the Catalan Treasury

The Catalan Government and the Provincial Councils of Barcelona, Tarragona, Girona and Lleida will merge existing structures, facilities, staff and resources to create Catalonia’s Tax Administration, which will collect all the local and Catalan taxes, such as Waste Management, Legal Documents and Gambling taxes. The taxes decided at Spanish level will continue to be collected by the branches of the Spanish Tax Agency, such as the VAT, Income and Corporate Taxes. The new Catalan body, called ‘Tributs de Catalunya’ (‘Catalonia’s Taxes’, in English), will not represent any extra cost. It will merge existing offices and create a network of single contact points for citizens and companies to pay their taxes to town halls and the Catalan Government. It has been built on the existing tax branches of the Provincial Councils, in charge to collect local taxes, and the four branches of the Catalan Tax Agency, depending on the Catalan Government.

‘Tributs de Catalunya’ will have 150 branches, located throughout Catalonia, and 1,421 staff members. As supra-municipal bodies assisting town halls, each of the four Provincial Councils will contribute their existing network of branches to pay local taxes and the associated staff. Barcelona will bring 101 existing branches and 665 civil servants; Girona, 9 branches and 95 public employees; Lleida, 10 branches and 111 people; and Tarragona, 26 branches and 208 workers. The remainder will come from the small Catalan Tax Agency, which has 4 branches and 342 staff members, which collect the Catalan Government’s current exclusively-managed taxes.