tax

The stability of the parliamentary term in office and the relationship between the Catalan Government and the radical left-wing party CUP are at risk after the latter decided on Tuesday to maintain its total opposition to the 2016 draft budget bill. The Catalan Vice President and Catalan Minister for Tax Office, Oriol Junqueras, said that the decision will have “extremely severe consequences” and that “social services” will be particularly affected. The Catalan Government spokeswoman, Neus Munté, warned that the stability of the current term was “hit” and regretted that CUP didn’t respect the agreement with the pro-independence cross-party list ‘Junts Pel Sí’, the main party in the Parliament, through which they committed to “guarantee parliamentarian stability”. Munté also warned that CUP’s veto “will have consequences” but emphasised the government’s aim to “continue working to put Catalonia at the gates of independence”. CUP’s rejection of the bill, which they considered insufficient and still too “autonomic”, forces the Catalan Government to extend the 2015 budget.

Catalan Vice President and Catalan Minister for Economy and Tax Office, Oriol Junqueras “totally” rejected the idea that Catalonia will face new elections if pro-independence radical left CUP reject the draft budget for 2016 presented by the Government. In an interview with Catalunya Radio, he urged pro-independence cross-party list ‘Junts Pel Sí’ and CUP to “make the most of the 72 seats majority in the Parliament” rather than thinking about potential new elections. Junqueras also refused to start negotiating with other groups in the Catalan Chamber if CUP keeps up their veto on the bill, as it would mean “renouncing the pro-independence roadmap”.

The draft budget for 2016 presented by Catalan Vice President and Catalan Minister for Economy and Tax Office, Oriol Junqueras, doesn’t have enough support to be passed by the Parliament. Although Junqueras described the budget as “realistic”and “socially committed”, pro-independence radical left CUP considered it insufficient and still too “autonomic”, and claimed that the draft didn’t “reflect the pro-independence declaration proposal”approved by the Catalan Chamber on the 9^th of November. Thus, CUP presented their veto and urged the Catalan Government to present a new draft which would include the anti-capitalists’ proposals, such as disobeying the deficit target imposed by the Spanish executive and carrying out a deeper reform of the tax system. Catalan President, Carles Puigdemont, warned that in order to “complete the task”and put Catalonia “at the gates of independence”the Parliament should at least be allowed to process the budget. This Friday, Puigdemont accused CUP of being “destroyers”if they continue to be carried along by “ideological prejudices”and maintain their veto on the bill.

Leo Messi and his father testified this Thursday before Barcelona’s High Court. They are accused of having moved 4.1m EUR earned from the player’s image rights to tax havens between 2007 and 2009. In his statement, the FC Barcelona player assured that his life is “limited to playing football” and that he had “full confidence” in his father and the lawyers who managed his publicity contracts. This is the same statement that Messi gave in 2013, when he had to testify before the Court for the same case. Spain’s Tax Agency has requested 22 months in prison for each of them for having moved 4.1m EUR earned from publicity contracts to tax havens between 2007 and 2009. On the other hand, the public prosecutor is only accusing Messi’s father.

The Catalan Government’s budget for 2016 has been drafted and €700 million more is to be allocated to social spending compared to the budget of 2015, according to the Catalan Vice President and Minister for Economy Oriol Junqueras. He also stated that the Health sector will see an increase of €317 million, while the Education budget will increase by €211 million and that of Social Services will grow by €173 million. An additional 50 million more euros are to be allocated to the sectors of Universities and Research, stated the Catalan Vice President. The budget will be increased for the first time in many years, with the goal of being “realistic” and avoid “generating expectations that cannot be satisfied”. The budget will be delivered this Tuesday to Parliament’s President Carme Forcadell and opened for discussion amongst the groups in the Catalan Chamber.

Catalan Vice President, Oriol Junqueras met this Thursday with his Spanish counterpart Soraya Sáenz de Santamaría in what Junqueras described as a “very cordial but very difficult” encounter. One of the main subjects laid on the table revolved around the recent suspension of several Catalan laws by the Spanish Constitutional Court (TC). In reference to this, Junqueras accused the TC of acting according to “political interests” rather than considering those of the citizens and asked Sáenz de Santamaría to reconsider the suspension of the Catalan law against energy poverty, as they announced a few weeks ago. Junqueras regretted that the Spanish executive is only temporary “when it is in their interest”. Junqueras, who is also Catalan Minister for Economy and Tax Office, also referred to Catalonia’s deficit target set by the Spanish government and described it as “unfair, arbitrary and far from what citizens deserve”.

In its first annual collection, a tax raised on banks and other financial institutions maintaining empty flats has generated €11.3 million. When it was first approved, the tax was only expected to raise €8 million. The revenue from the tax is a “very positive” first assessment according to Catalan Minister for Public Administration and Housing, Meritxell Borras. The revenue gained from taxing 198 institutions with flats that remained empty for two years or more will be used to purchase 260 properties for public housing in Catalonia. However, Borras is concerned that the tax will be “endangered” by potential interference by the government in state functions. 

The Catalan Government collected €43.5 million in tourism tax revenue in 2015, an increase of nearly 5.5% from 2014. Quarterly analysis shows a growth in revenue from hotels, cruises, and tourist homes used by those visiting Catalonia. Additionally, the Catalan Government said that 2015’s numbers show widespread growth in touristic revenues across almost all areas of Catalonia, with Terres de l’Ebre leading with an 11.6% growth from 2014. Catalan Ministry for Business and Knowledge Jordi Baiget said the increase in revenue is “parallel to the increase in tourists” who visit Catalonia — especially those who visit during the last quarter of the year, which in 2015 proved to be the most successful. 

The Catalan vice president and Catalan Minister for Economy and Tax Office, Oriol Junqueras, stated that the Government “won’t make any cuts”and emphasised that Catalonia already allocates 70% of its budget to social policies and that 90% of the Government’s expenses are final. Junqueras’ statements come after the Spanish Finance Minister, Cristóbal Montoro, sent a letter to several Autonomous Communities in Spain urging them to “comply with the budget stability”. Montoro also nuanced that Catalonia’s deficit target in 2015, which was 2.7%, surpassed the maximum deficit established by the Spanish government by 0.7%. “If the Spanish Ministry wants to make cuts or shut down hospitals, it will have to come and do it itself”, warned Junqueras. He also emphasised that “the Spanish Finance Ministry has imposed so many cuts in the last years that any additional ones are simply inapplicable”.

The law will first charge those vehicles emitting more than 160 grams of CO2 per kilometre and in 2020 the bar will be set at a lower level. “This is a law of a country which is committed to the global challenge that humanity is facing” stated the new Catalan Minister for Planning and Sustainability, Josep Rull. The aim is to reduce the level of emissions registered in 2005 by 25% before 2020 and “by 80% or even more” by 2050. Also this Tuesday, the 29 committees in the Catalan chamber for this term of office have been assigned presidents. 15 of them will be led by members of pro-independence cross-party list ‘Junts Pel Sí’, including the Committee for the Constitutive Process. Muriel Casals, former president of the cultural association promoting the Catalan language and culture, Òmnium Cultural, will be head of this committee set up to design the roadmap towards independence.

The members of the new Catalan executive took office this Thursday, more than three months after the 27th of September Catalan Elections resulted in the victory of pro-independence forces. Catalan President, Carles Puigdemont, called them to be “aware” of the citizens’ assignment “without renouncing anything”. ERC’s leader Oriol Junqueras has been designed to assume the Vice presidency and led the Department of Economy and Tax Office, one of the key areas of the new executive. Another novelty is the creation of the department for Foreign Affairs, which will be led by former MEP and ‘Junts Pel Sí’s top member, Raül Romeva.

Catalan Minister for Business and Labour, Felip Puig has denied that companies are withdrawing from Catalonia or moving their tax base to other parts of Spain due to the Catalan political process. On the contrary, Puig pointed out, more companies are leaving Madrid to set up their tax base in other Autonomous Communities. He went on to claim that "an orchestrated campaign with distorted data" has been carried out to induce "fear" in companies, investors and the whole of the Catalan citizenry. Puig also emphasised that some of the companies which have changed their tax base have kept the business and the production within Catalonia and noted the 281% rise in foreign investment in Catalonia. 

The Spanish Constitutional Court (TC) announced this Wednesday the acceptance of the appeal made by the Spanish government to stop the reform of Catalonia’s Tax Agency. The TC declared “invalid and unconstitutional” article 4 of Law 9/2015, which stipulated that all those civil servants who want to be eligible for a position in the body would need to have permanent positions in Catalonia. According to the law reform, those “officials who are assigned duties substantially matching those of the body and who already hold permanent positions within Catalonia’s borders”would be eligible to voluntarily join the Catalan Tax Agency through specific selection processes. The Spanish government’s appeal claimed that the proposal was against “the right of all Spanish citizens to access the entity under the same conditions”.

Catalan government spokeswoman, Neus Munté, stated that the suspension will be appealed and described the decision as “another example of asphyxia and re-centralisation”. The Catalan reform stipulated that all those civil servants who wanted to apply for a position in the entity, would need to have permanent positions in Catalonia. The Constitutional Court (TC) considered the new law to have violated the right of all Spanish citizens to access the entity under the same conditions. 

The President of the Catalan Government, Artur Mas, presented on Monday the model for Catalonia's own Treasury, which will be developed should "the political conditions" be there, he stated. "This is the most serious attempt to build our own Treasury in the last 300 years", stressed Mas. "After two years of work, we are ready" to launch and Catalans should not waste "this great opportunity", he stressed. "Without our own Treasury, there is no real self-government", the Catalan President stated. The system would include Catalonia's own Tax Agency and  is inspired by the taxation authorities in countries such as Sweden, Denmark and Australia, which prioritise cooperation with taxpayers over controlling them. In these models, efforts are concentrated on severely persecuting tax evaders and underground economy, while the vast majority of tax-payers who deal correctly with their fiscal obligations receive assistance and have unlimited access to their fiscal data.