Catalonia’s government says it will start collecting taxes if it wins independence referendum, as Madrid cries foul

Spain’s government warns it may prosecute anyone who pays their taxes to the Catalan agency, instead of the national tax collector

PUBLISHED : Tuesday, 05 September, 2017, 6:24am
UPDATED : Wednesday, 11 October, 2017, 11:31am

Catalonia’s pro-separatist government said Monday it has set up its own tax agency that is ready for action if the pro-independence camp wins a contested October 1 referendum.

“We have put in place the structures necessary for Catalonia to be ready to enforce the will Catalans express in the October 1 referendum,” the head of the Catalan regional government, Carlos Puigdemont, told a news conference called to present the tax agency.

He has said Catalonia will declare independence from Spain within days if voters back secession in the plebiscite. If the “No” side wins, an early election would be called to form a new government in the wealthy northeastern region including Barcelona.

Pro-separatist parties, which control the regional assembly in Catalonia, are expected to approve the law that lays the groundwork for the referendum on Wednesday.

Spanish Prime Minister Mariano Rajoy’s conservative government has vowed to immediately challenge the law in the courts to stop the referendum, which it deems illegal.

He dismissed the law on Monday as an attempt to “cheat democracy” and vowed his government would respond “with proportionality and intelligence”.

“They want to bypass all legal procedures which are used in all civilised and democratic parliaments around the world” with this law, he added.

Rajoy’s government has also threatened legal action against top Catalan political figures involved in the plebiscite.

The Catalan tax agency has more than doubled its workforce to 800 employees from just 321 in 2015 when separatists won a clear majority of seats in Catalonia’s parliament. It boosted the number of its offices to 32 from just four during this time.

The agency has also set up a new software programme which will allow it to collect all types of taxes within a few months.

Spain’s central government currently collects most taxes and then distributes funds to regional administrations.

“The goal of this deployment is to have the capacity to manage taxes regularly and in a large scale,” Catalonia’s vice-president Oriol Junqueras told the news conference.

Puigdemont said the Catalan tax agency would be “fairer” and “closer” to citizens.

Many in the region argue that Catalonia pays more in taxes to the central government than it receives in services and infrastructure.

Spain’s finance ministry warned in a statement that anyone who paid their taxes to the Catalan tax authority instead of to the central government’s tax agency could face “criminal penalties”. It did not give further details.

Catalonia, a wealthy region of 7.5 million people with its own language and customs, has significant self-governing powers.

But economic doldrums, public spending cuts and perceptions of unfair taxes and the concentration of power in Madrid have fed support for independence.

Opinion polls show Catalans are evenly divided on independence. A large majority, however, want a referendum to take place to settle the matter.