Government readies taxes for independent Catalonia

BarcelonaOne of the key pillars of the transition to independence is a Catalan Treasury. So far, the ministry led by Vice-president Oriol Junqueras has been busy developing all the regional powers that had not been deployed up to now--other Spanish regions have tax agencies with more heft-- but it is also working towards an eventual break with Spain. According to department sources, the Government is preparing the legislative framework for the taxation system of a Catalan Republic, and before the year ends --as these same sources have told ARA-- it will roll out a general tax law. Its goal is to define the tax system for an independent Catalonia (income tax, VAT, business taxes, and other taxes they might decide to establish) and their rates. According to sources, the most likely scenario is for the bill to move forward before November in the framework of the joint report on a Catalan Treasury to be unveiled in Parliament by Junts pel Sí and the CUP, the two separatist groups in the Catalan chamber.

This new legislation is in addition to the bill on a Catalan Tax Code presented at the beginning of July by the anti-capitalists and the coalition between CDC, ERC, and independents, which includes the first, second, and third books related to the administration of tax bodies. Unlike this first bill, which still fits within Spain’s regional system, the general tax law would become part of the new Catalan legality and would take effect if independence is declared. Two more laws will also be proposed regarding customs and the property valuation system. In fact, the report by the Advisory Council for the National Transition (CATN) on the tax administration advises that —prior to the break with Spain— the Catalan government should begin drafting this general tax law, the Catalan Taxpayer Statute, and the schedule of fees and penalties for those who do not comply with their obligations.

A new Director General

To become the Treasury of a new independent country, the Catalan Tax Agency must increase its workforce-- it currently has 377 employees, while the CATN stated that it would need 7,000 for the new tax system as a whole. "Starting up the machinery has been a struggle", noted one of the sources, who admitted that the administration has been having difficulty finding personnel who can pass the civil service entrance tests for the position of tax manager and inspector. Sources with knowledge of the selection processes noted that in the latest seating only 6 of the 20 positions of inspector on offer were filled on a permanent basis. The rest were covered with temporary staff.

According to ministerial sources, to overcome this handicap, on September 13th the Government will appoint a Director General of Fiscal Studies, which will be the embryo of the future Institute of Fiscal Studies-- also suggested by the CATN.

The appointee will be Montserrat Peretó, Professor of Finance and Tax law at the UAB. The deployment of this institution will include the training of human resources needed for the tax bodies, as well as drafting papers on taxation, and could be "instrumental" to preparing personnel if it has to take on powers beyond the current regional framework. After the 11-S Diada, Lluís Salvadó, Treasury Secretary, will appear before Parliament to sketch out the situation of the Catalan Tax Agency.