September 19, 2020

Castilla-La Mancha leads the judicial riot of the socialist barons against the Treasury


MADRID

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The judicial rebellion of the autonomous communities against the Ministry of Finance and the 2,500 million VAT pending collection also extends between the communities governed by the PSOE. After what Catalonia (443 million pending), Madrid (377), Andalusia (537), Galicia (200) and Murcia (85) they filed appeals or announced that they would go to court, today it has been Castilla-La Mancha that has joined the rebellion, in what is the first socialist community.

Your president, Emiliano García-Page, has confirmed that tomorrow it will authorize the Board to present “legal remedies” that may take place. García-Page a week ago put an ultimatum until today for the Treasury to distribute to its region the 130 million that the State owes him for the 2017 VAT settlement. García-Page has pointed out this morning in the presentation of some « Employment shuttles »that are due to the interests of your community rather than the party. End of ultimatum.

It is not the only socialist region that can join. Asturias (75) and Aragon (80) They have already threatened to file two resources if there is no solution before.

A scenario that seems distant: the Minister of Territorial Policy, Carolina Darias, has asserted to the Cadena Ser that «Do not see feasible» that the Government pays the outstanding monthly payment this year. Same position as the Treasury. Balearics (with 78 million pending) does not rule out any route, while the Valencian Community, without even talking about legal actions, has also expressed its discomfort.

Treasury refusal

The problem derives from a measure adopted in 2017 by the Ministry of Finance that was then commanded by Cristóbal Montoro. By approving the computerized declaration of VAT (the Immediate Information System), the tax date for companies was delayed to allow them to adapt to the new system, which caused that in that year, for cash purposes, only eleven months were collected.

As the communities receive 50% of the income from the tax, in 2017 the State covered the part of the communities, but the financing model indicates that after two years the Executive sees the differences against the distribution of expected revenues that the Central Government distribute In 2019, the liquidation came and left the communities with 2.5 billion of revenue less fruit of this 2017 decision.

The State: 13 months of VAT; the CC.AA, eleven

In this way, the State collected 10 months of revenue from cash collection in 2017, compared to twelve of the communities. In 2019, the State when making the liquidation of 2017, was left with 13 months of collection of the tax – one of them as a result of the 2017 less than it received – and the communities, with eleven.

In terms of accrual, which is the one taken into account for the deficit and national accounts, this effect leaves the regions with the most deficit in 2019 and the state, with less due to the greater and lesser resources respectively, although in total it has no impact on the deficit of all administrations since what the regions lose is won by the Central Government. These 2.5 billion are equivalent to two tenths of GDP of greater or lesser imbalance. Therefore, some regions such as Andalusia ask to soften the fiscal objectives of the 2019 regions to include the consequences of this situation.

The finance minister, Maria Jesus Montero, included in the draft Budget of 2019 a VAT reform to re-advance the date of entry, and thus give the regions a monthly payment more than offset the settlement. However, Congress did not approve the accounts, which precipitated the call for elections. Now Montero refuses to pay this monthly payment, since at the end of 2019, he would no longer distribute this amount to the regions since they had spent the two relevant years to settle the differences of the 2017 financing model. The minister also recalls that the PP voted against the Budgets.

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