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Understanding Spain's Controversial Push To Give Catalonia Control of Its Taxes

Jul 31, 2024 | 16:57 GMT

Spanish Prime Minister Pedro Sanchez (left) and Catalan regional president Pere Aragones (right) pose during their meeting at the Generalitat Palace in Barcelona on July 24, 2024.
Spanish Prime Minister Pedro Sanchez (left) and Catalan regional president Pere Aragones (right) pose during their meeting at the Generalitat Palace in Barcelona on July 24, 2024.

(JOSEP LAGO/AFP via Getty Images)

In Spain, a proposal to grant Catalonia's regional government full control of its taxes would, in the short-to-medium term, appease secessionist sentiments in the region, but over time it would make a future Catalan independence drive easier, as well as deprive the central state of a substantial source of revenue and generate a right-wing backlash. On July 30, the Socialist Party of Catalonia (PSC), which is the Catalan branch of Prime Minister Pedro Sanchez's Socialist Party, and the pro-independence Republican Left of Catalonia (ERC) announced an agreement to give Catalonia full control of all the taxes collected in the region. The pact establishes that starting from 2025, Catalonia will fully collect and spend income tax in the region, with other national taxes transferred to the region in successive years. The ERC will hold an internal vote on this pact, and the results will be announced on Aug. 2. Spain's Congress...

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