Government tests Catalan Treasury software with new taxes

The Catalan government’s capacity to collect tax revenues and keep cash in its coffers will be crucial when secession occurs. A year after IBM won a tender to develop a computer programme for the new Catalan Treasury, the government will test it with the new taxes that are due next year.

Sources within Catalonia’s Finance Ministry have confirmed to this newspaper that the new taxes agreed by pro-independence groups Junts pel Sí (JxSí) and the CUP will be managed by e-Spriu, a much more “cutting-edge” IT system than today’s, with the “capacity” to handle all taxes in the event of independence, including the ones currently managed by Madrid.

Unlike the software presently in use (G@udí), the new programme will be able to handle “massive, periodic submissions of tax returns” based on rolls, such as VAT and income tax statements, which are currently collected by the Spanish tax authorities.

For now, though, the Catalan Treasury has no plans to overstep the region’s powers and it will be testing the new software with the taxes already being collected by the Catalan authorities.

In the short term, the new taxes that will provide a trial run to test the new IT system are the tax on large shopping centres, the tax on sugary drinks, the tourist tax, the tax on radiotoxic items and the tax on unproductive assets. The latter —unlike the others— will be created through a bill jointly drafted by JxSí and the CUP with a view to taxing properties, luxury vehicles, yachts and aircraft that do not yield a profit for companies.

Still, when will the government be in a position to handle all taxes in Catalonia? Our sources claim that “when the time comes, we will be ready” and they openly admit that the exact time will depend on the political circumstances. However, they would not divulge when exactly the new software will be ready to take over the taxes currently managed by Madrid. The Catalan Finance Ministry is adamant that e-Spriu will be able to do so, as it allows for extra add-on features further down the road. In fact, the conditions outlined in the tender contract won by IBM —as reported by this newspaper— state that the software must be capable of “fully managing all taxes”.

Replacing the previous programme

To understand how the new programme will work, one needs to picture a platform made up of horizontal and vertical modules. The former would be the key structure with which the Treasury has been working lately, and they are procedures shared by all the various taxes. The vertical modules, though, are unique to each tax and they can be added on to the system progressively. One of our sources, who believes that the new computer system will bring “a huge leap forward” for Catalonia’s Treasury, remarked that “we have upgraded from a 20th to a 21st century programme”. At present the Catalan Treasury is using a programme known as G@udí, a proprietary taxation management system that was developed by Indra at the turn of the century. The Catalan authorities had been using it for over a decade by the time the new system was commissioned last year.

More branches and staff

Information Systems is one of the pillars in the development of Catalonia’s own Treasury because the tax management programme will sort through all the taxpayers’ personal details and will encompass every tax management process that all countries employ to finance their services. The Catalan Treasury is currently developing the regional powers in the run up to the referendum on independence, scheduled to be held in Autumn 2017. New branches will need to be opened to cover the whole country and additional staff will be hired.

While there are nearly four hundred employees working in the Catalan Treasury, the goal is to bring that figure up to eight hundred by the end of next year by adding the staff who handle payments in property registry offices, as well as the managers and inspectors who pass the civil service entrance exams. The challenge for the Treasury is to ensure that tax revenue rises from €2,306m per annum in order to have €4.5 bn in the kitty so as to finance the first few months following independence.