Madrid hits Catalan government where it hurts, cuts off its tax income


Spain prepared Monday to cut the rebel Catalan government off from all tax income, depriving officials of salaries and the means to fund any secessionist campaign.

In a months-long standoff with the northeastern region, the central government already seized control of much Catalan public spending in September.

This was to try and stop an independence referendum that went ahead regardless, and yielded a “Yes” vote on Oct. 1.

Now Madrid will move on the regional authority’s last outstanding source of revenue — taxes and levies it always used to collect directly — tax on inherited property for example, or university registration fees.

In a bid to stop Catalonia breaking away, Spain’s Senate is expected to vote on Friday on measures to wrest control away from the semi-autonomous region.

Prime Minister Mariano Rajoy’s Popular Party holds a majority in the upper house of parliament, and the measure is expected to pass without a hitch.

If this happens, the Catalan tax office will no longer answer to the region’s finance minister and vice president, Oriol Junqueras, but to the central budget ministry instead.

With Madrid already in control of the rest of Catalonia’s tax income, such a move would leave the Generalitat, Catalonia’s government, bereft of cash.

Madrid is responsible for collecting the majority of taxes in Spain, which it then distributes among its 17 regions, which in turn pay public servants and make provision for education and social services.

Only the Basque Country and Navarra collect their own tax.

But from Sept. 15, Madrid stopped paying its share over to the Catalan government, opting instead to pay directly for “essential” services such as hospitals, schools, and police, as well as civil servants’ salaries.

Banks received instructions to strictly control all accounts and bank cards of the Catalan executive.

At the end of last month, fears were high that 170,000 Catalan public officials may not get paid after the Generalitat refused to provide central authorities with a complete employees register.

A deal was reached at the last minute, and everyone got their salary.

If the Senate votes to dissolve the Catalan government, Madrid will have direct access to its personnel registries, and payments should continue problem-free.

But the central government has also said it would stop paying the salaries of separatist leaders — with Catalan President Carles Puigdemont topping the list.

“He will no longer get a cent,” Deputy Prime Minister Soraya Saenz de Santamaria said Monday.

Since the 2008 economic crisis, the question of money has been a key reason for growing resentment among Catalans who feel they contribute more to the central purse than they get back.