Catalonia studies claiming 1,700 million from the State through the courts to compensate for tax cuts

by time news

2023-07-12 15:50:31

The Generalitat He has listed the economic “grievances” of the State with respect to Catalonia, of up to 20,000 million euros that he cannot dispose of according to his calculations, and he is studying a judicial claim for the collection of the €1.7 billion which correspond to the income that the Government considers that it should receive to compensate for the Government’s tax reductions.

Sources from Palau assure that there is a “vertical imbalance” between the State and the autonomies that “systematically and silently affects” the provision of services, which is exemplified in four areas: the drop in revenue due to tax cuts, the receipt of 27% and not 50% of the VAT that would correspond, the “unfair” distribution of the deficit targets and the “lack” of investments.

The ‘Councillor’ of Economy, Natalia Mas, has demanded by letter to the Ministry of Finance compensation for the drop in tax collection and has ensured that, in the last decade, between 2012 and 2022, State revenues have grown by 88.7%, more than double that of that of the autonomous communities (40%), for which reason Executive sources consider that by doubling the State its resources “there is a recentralization”, something that they do not see as “coherent” since the autonomies are “the ones that cover and sustain most of the of the welfare society. In any case, they admit that the reversion will be complex due to the impact of the electoral campaign and a possible change of political color in Moncloa.

tax changes

In recent years, partly due to the impact of the covid-19 pandemic and the war in Ukraine, the Government has promoted changes in collection. On the one hand, lowering the special tax on electricity –from 5.11% to 0.5% from 2021 to December 2023- and the VAT applied to electricity –from 21% to 10% in 2021, and from 10% to 5% in 2022-. For this, and counting on the VAT on gas, masks and basic foods, the Government calculates that it has stopped receiving 1,676 million euros, for which reason it demands that it be compensated through the liquidation of the financing model that is carried out in this July. Thus, he has asked to receive 172 million this month, 642 million next year and 682 in 2025.

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On the other hand, the Government complains that the State You are not transferring the 50% of the VAT that would correspond to you, but 37%, due to changes in the tax. “And the increase derived from the rate rise has remained with the State,” they inquire, since the general rate went from 16% to 18% in 2010 and from 18% to 21% in 2012. “So we continue to receive the VAT that would touch us as if it were at 16% ”, they poke around, and calculate that the accumulated loss of collection in this case stands at around 13,000 million euros between 2010 and 2021. However, the changes of the Government are contemplated in the law of the financing model, which provides that the additional income derived from the modification of VAT and excise taxes will remain entirely with the State. But although the State has been able to compensate it by creating extraordinary taxes, such as that of banks or energy companies, the autonomies do not have that capacity. Hence the fund’s political claim, since through the courts in this case is practically “impossible”.

Regarding the deficit objectives, the Generalitat criticizes that by 2024 the State reserves 100% of the margin assigned by the European authorities “while asking the autonomies for a zero deficit and a surplus of two tenths to the municipalities.” The last of the grievances that the Government lists are the parcels, which just a few days ago agreed with the Government on the protocol to the transfer of 914 million euros that will be dedicated to infrastructures. “Only 54% of the budget has been executed since 2018, while in Madrid it has been 124%,” they complain.

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