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Andalusia Rejects Spain’s Financing Plan, Saying It Deepens Gap With Catalonia

The proposal raises regional funding by boosting the shares of income tax plus VAT ceded to the communities.

Overview

  • Despite being slated for the largest nominal gain, the Junta de Andalucía says the model fails to fix its underfunding and would widen its distance from Catalonia.
  • Finance Ministry figures indicate Andalucía would receive €4.85 billion more plus €965 million from a complementary fund under the proposal.
  • The national plan would inject more than €20 billion into autonomous communities by lifting the ceded shares of IRPF to 55% and VAT to 56.5%.
  • Andalusian leaders criticize the process as negotiated with ERC behind other regions' backs and decry a lack of transparency during an electoral period.
  • Finance Minister María Jesús Montero has signaled limits on regional tax cuts and a push to recover levies such as Inheritance and Donations, a shift the Junta says could endanger seven Andalusian tax reductions worth about €1 billion a year.