The Government and the Generalitat (Catalan Government) agree on a unique financing agreement for Catalonia, extending it to the rest of the autonomous regions, which will allow it to collect even more taxes and expand its own Treasury.

The government and the Generalitat are shaping the unique financing that helped ERC unblock Salvador Illa's investiture as Catalan president. Now, with the PSC on the other side of the table, the central government has agreed to withdraw the autonomous community's taxes, most notably personal income tax, from the common fund, which will lead the Catalan administration to manage more than €25 billion in taxes.

This Monday, the Minister of Territorial Policy and Democratic Memory, Ángel Víctor Torres, and the regional ministers of the Generalitat (Catalan Government), Albert Dalmau (Presidency) and Alícia Romero (Economy and Finance), finalized the agreement, which still has a long way to go before it is formalized. Until the law is amended, management will be shared.

"This is an agreement between institutions that allows for a very important paradigm shift in terms of financing," Dalmau celebrated in his appearance. "We're moving from an expenditure model to a revenue model," he added.

The pact with Catalonia is extendable to the rest of the Spanish territories, which would decide what level of tax management they would like for their autonomous institutions. In the Catalan case, the Generalitat (Generalitat) is committed to collecting and managing 100% of the taxes generated in Catalonia, something that the other autonomous regions could also do, although legislative changes would be required.

"It will be a blend of bilateralism between Catalan needs and the multilateralism of the other autonomous regions," Dalmau emphasized. The central government will submit its proposal for national regional financing to the Fiscal and Financial Policy Council after the summer. The Cortes Generales would then have to endorse the final model.

However, to achieve this, they would need their own tax administration, something many of them lack. Catalonia does have one, although it should be given more resources and see how to transfer inspectors from the state treasury to the regional treasury, something they have so far rejected. To give an example: the Catalan treasury has 850 employees, and the regional Tax Agency has more than 4,000.

Thus, this July, the Generalitat (Catalan Government) will present the plan developed in collaboration with Indra to strengthen the Catalan Tax Agency's capabilities so it can perform its functions. The dream launch would be in 2026, with the transfer of 100% of personal income tax, although it will have to work against the clock to manage such a large amount of resources and make the necessary amendments to the tax transfer law and the Organic Law on the Financing of the Autonomous Communities (LOFCA). It is most likely, however, that this date will not be reached and that an initial policy of co-management will be implemented.

The Minister of Territorial Policy and Democratic Memory, Ángel Víctor Torres, outlined the details of the agreement, which lays "the foundations for specific financing within the framework of the system's reform." "We are committed to working on the implementation of the Catalan Tax Agency and promoting the necessary legislative changes," he added.

The agreement will involve a solidarity contribution calculated "in a transparent manner," Torres assured. He also emphasized that "bilateralism will be compatible with multilateralism."

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