Tax Agency Catalonia Power ERC Expansion
catalonia Bolsters Tax Agency in Bid for Financial Autonomy,Sparks Debate
Barcelona – The Catalan government is set to substantially expand the powers and resources of its Tax Agency of Catalonia (ATC) in a move aimed at greater financial autonomy,but the plan is already stirring debate among political factions.
In its first meeting after the summer recess this Tuesday, the regional government will approve a ”contract-program” designed to give the ATC more versatility in expanding its staff and capabilities. This initiative,spearheaded by a decree law,will modify the legal framework of the ATC to align it with the envisioned “singular financing” model,where the Generalitat (Catalan government) would collect all taxes within Catalonia.
The contract-program will grant the tax agency full autonomy in personnel matters, enabling it to create specialized tax bodies with tailored professional profiles. Specifically, the plan envisions the creation of a body of tax agents and a higher body of tax computer science experts. The document will also outline strategic objectives, performance indicators, financial resources, and planned activities for the ATC.
This measure, announced in July, is the result of an agreement between the Catalan Socialist Party (PSC) and the Republican Left of Catalonia (ERC). The government stated its objective is for the ATC to possess the necessary legal and organizational tools to efficiently and effectively exercise its new powers under the proposed financing system. The decree law will amend the second book of the Tax Code of Catalonia, approved in 2017, which governs the Tax Administration of the Generalitat.
In essence, the decree will provide the Regional Tax Agency with the autonomy to organize itself internally, even allowing it to participate in collective bargaining with its employees.
The Generalitat has previously utilized contract-programs to streamline operations within its public entities,with Ferrocarrils de la Generalitat (FGC),the Catalan railway operator,already operating under this model.
Master Plan Delay?
However, the government’s ambitions for the ATC are not without controversy. The recently unveiled ATC Master Plan reveals a potential delay in the autonomous management of the Personal Income Tax (IRPF), a key element of the investiture agreements between Republicans and Socialists.
While the agreement that brought Salvador Illa to the presidency of the Generalitat stipulated that the Autonomous administration should begin managing IRPF revenue in 2026, the ATC’s Master Plan pushes the assumption of initial functions (not all) to 2028, the final year of Illa’s term. The document consistently emphasizes collaborative management with the State Tax Administration agency (AEAT). Until 2028, the regional agency will primarily focus on providing taxpayer assistance, as it has done in recent income tax campaigns.
This shift in timeline has drawn criticism from ERC. While the party leadership downplayed the delay as part of a “technical document,” they are together planning to advocate for the IRPF transfer to the Generalitat in the Spanish Congress of Deputies. Oriol Junqueras, a prominent ERC leader, has urged the government to intensify its efforts in deploying singular financing if it hopes to secure a budget agreement by 2026.
Despite the debate surrounding the IRPF timeline, the need for an expanded and strengthened ATC is widely acknowledged within Catalan authorities. The agency already hired an additional 102 temporary workers to assist the AEAT during the last IRPF campaign, highlighting the growing demands on the agency’s resources.