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Diari Catalunya

Spanish Government proposes new regional financing model with €21 billion boost

Vice President Montero suggests increasing the transfer of IRPF and VAT collection to autonomous communities to secure more funds and territorial solidarity.

Representació visual de la distribució de fons entre administracions, amb gràfics o piles de monedes.

Representació visual de la distribució de fons entre administracions, amb gràfics o piles de monedes.

Vice President María Jesús Montero announced Friday the Government's proposal to reform the regional financing model, which will inject an additional 21 billion euros into the autonomous communities.

The project, drafted after a pact with ERC, seeks to update a system approved in 2009 that should have been revised several times. The Minister of Finance, María Jesús Montero, detailed that the overall increase in annual resources will be close to 21 billion euros compared to the current model.
Catalonia will receive an additional 4.686 billion euros, the second largest increase, only behind Andalusia. To achieve this increase, the project proposes raising the percentage of IRPF (Income Tax) and VAT collection ceded to the communities, moving from the current 50% to 55% for income tax and 56.5% for value-added tax.
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"No autonomous community will be harmed, because the system will have more resources."

María Jesús Montero · First Vice President and Minister of Finance
The project will be presented to the Fiscal and Financial Policy Commission (CPFF) next week. Although the Minister hopes it will be in force by 2027, opposition from parties like Junts and the PP makes its final approval in the Cortes currently unlikely. The new model will incorporate territorial solidarity and respect the ordinality agreement reached with ERC.
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