Catalonia opens its own tax collecting agency - VilaWeb
Catalonia opens its own tax collecting agency
The 'Tributs de Catalunya' [Catalan Revenue
Service] has two objectives: collect tax information and control tax
revenue · Eight questions and answers about the Catalan Government's new
network
Tributs de Catalunya [Catalan Revenue Service], the Catalan
government's new network of offices open to Catalan taxpayers, opens its
doors today with an official presentation by President Artur Mas. This
tool—'state structure' in sovereigntist parlance—is the first step in
the new model of the Catalan tax collecting administration. The goal is
to collect all of the taxes paid by Catalan businesses, institutions,
and individuals, even if the final destination for the revenues is not
the Catalan government. The tax information and key to the cashbox are
crucial for creating a Catalan state, but the network has its own
rationale in the autonomic era as well.
The opening ceremony will
take place this morning in the Torres Gracia Hall of the Generalitat
Palace [seat of the Catalan Government]. Tributs de Catalunya is the
product of the agreement signed on September 19, 2012 between the
Agència Tributària de Catalunya [Catalonia Tax Agency, ATC] and the four
Catalan "Diputacions" [Spanish State institutions that are part of the
local administration]. The network will manage local taxes that were
previously managed by the local 'diputacions' and also the taxes that
correspond to and are managed by the Generalitat through the ATC. The
inaugural ceremony will also include a demonstration of the website that
connects the online portals of the organisms that exercise the
application of taxes in Catalonia.
With the aim of understanding the goals, size, and limitations of the
Catalan Revenue Service we offer you these eight questions and answers:
When it will start to work?
This year's income
tax declarations will be the first test facing the Catalan Revenue
Service. Individuals generally present this declaration to the Spanish
State Tax Administration Agency (AEAT) but the Generalitat will invite
people to declare their income tax voluntarily through the Catalan
agency in order to begin to collect Catalonia's own data. The idea is
that if the moment comes when the government has to assume 100% of the
tax collection function, that the machinery will already be in place
with the necessary information so that it will be able to take this step
without undue risk. The law that accompanies the Generalitat's budget
for 2014 includes the ability of the ATC to ask for declarations from
citizens and businesses, a measure designed specifically to allow for
collecting as much tax information as possible. For that reason, the
Catalan administration's goal is to have the network working by this
May.
Who can use the Catalan Revenue Service and what taxes will they be able to pay there?
Both
individuals and businesses will be able to pay their taxes through the
Catalan Revenue Service. The principal objective of the government's
strategy is to offer a single office that simplifies the payment of
taxes. That's the reason that the four 'diputacions' and municipal
governments are on board. The agency can collect state taxes as well,
which are the bulk of the taxes that have to be paid, as well as serve
as a bridge to the state administration. Therefore, everyone who pays
taxes in Catalonia—both individuals and businesses—can pay those taxes
through the offices of the Catalan Revenue Service.
How many offices will the network have?
The ATC
currently has four offices, one in each provincial capital—Barcelona,
Lleida, Tarragona and Girona. The inauguration of the Catalan Revenue
Service will mean opening fifty-three tax collection offices, which may
be expanded to one hundred fifty during the coming months and years. One
of the first logistical objectives of the entity is to have offices in
all of the counties in order to facilitate payment by all individuals
and businesses as much as possible. The Barcelona 'Diputació' will make
twenty-one of its offices available to the Catalan Revenue Service,
Lleida ten, Tarragona twenty-six and Girona eight.
What resources will be necessary to make the agency work?
Tax
collection depends on two kinds of resources: first, a corps of
employees that is proportional to the population size and second,
software that has the capacity of managing all of the tax revenue
information. With respect to the first point, the European Commission
suggests that there be one thousand workers dedicated to tax collection
for every million inhabitants. According to this recommendation, the
optimal size for the Catalan Revenue Service would be around 7000—8000
employees. At the moment that this process of creating a Catalan revenue
service is being begun, the Catalan administration has just over 1400
employees. The report that the National Transition Advisory Council
(CATN) made regarding tax administration said that the agency would have
5000 employees at the moment that the Catalan State is created. The
CATN was counting on automatically including the current employees of
the Spanish agency to the new Catalan state structure.
What will the Catalan Government do with the money?
The
Generalitat will serve as the go-between for those tax revenues that
are not under its jurisdiction. That is, it will send the collected tax
recepts to the corresponding administration in each case. The taxes that
it currently collects will continue as before. With this strategy, the
Generalitat has the possibility of gaining tax information from most of
the economic transactions in Catalonia. Nevertheless, the success of the
project will depend on the collaboration of the citizenry. For that
reason, the Generalitat anticipates that this cooperation will become a
significant act for those who participate.
How much money do they expect to collect?
At this
time, the Generalitat collects about 2 billion euros each year. Most of
those funds come from inheritance taxes, property transfer taxes, legal
taxes, taxes on charitable contributions, and property taxes. The
estimates that the CATN has made for potential tax collection of a
future Catalan state is about 70 billion euros. In fact, depending on
the level of taxes levied by the Catalan state, tax revenues could be
anywhere between 40 and 100 billion euros. For the time being, the goal
of the Catalan Tax Revenue's first year in service—keeping in mind that
the use of the agency to pay one's taxes is strictly voluntary—is about
30 billion euros. That is the amount that would be necessary to finance a
hypothetical Catalan state for the first few months, without help from
the Spanish state.
For example, if we estimate 20% of the total gross revenues obtained
by the Spanish agency, we're talking about 40 to 50 billion euros. If
the estimate is made based on Catalonia's GDP, the result is 70 billion
euros, based on the average Spanish tax rates of the last five years. If
we estimate the revenues using the average tax rates in the European
Union, revenues might go as high as 80 billion euros. And if Catalonia
opted for a Scandinavian-type model, with very high taxes, the tax
revenues could reach 100 billion euros annually.
Could this structure be used in a future independent State?
Clearly,
this 'state structure' is important even if Catalonia does not become
independent. That is, wanting to collect taxes is not a goal that is
solely linked to the creation of an independent state. In any case, like
all the so-called 'state structures', it responds to the desire for
sovereignty and is an anticipatory step to achieving a state. If the
moment comes for proclaiming independence, Catalonia will already have
an experienced, data-rich tax collection agency at its disposal to keep
risks to a minimum.
Can the Spanish State block the Catalan Revenue Service?
Spain
cannot keep the Catalan Government from setting up the Catalan Revenue
Service. Currently, the tax collection offices of the ACT already have
the capacity to collect state taxes and transmit those monies to the
state. Since the goal is not to keep the collected monies, it will not
be infringing the law. The new tax collection structure of the
Generalitat is part of a set of structures that already existed, through
previous mechanisms, but with more strength and size than they had up
to now. In practice, there is no new legal or procedural activity that
could be considered an infraction of the law. The Spanish State has no
legal recourse against it. It can, however, try to scare businesses and
individuals in order to undermine the Generalitat's strategy. But it
can't go any farther than making threats.
Catalonia's new Revenue Service
