Illa and ERC will activate a key element of the future Catalan Treasury this Tuesday.

New term, old priorities. The PSC government will grant autonomy to recruit staff at the Catalan Tax Agency today. This is the first of several legislative changes that the ERC is calling for to be accelerated.

Salvador Illa's (PSC) government returns from summer break this Tuesday and, at its first regular meeting, will clearly state its priorities for the start of the new political year: advancing the rollout of its "own treasury" and "bilateral financing."

Specifically, a legislative amendment will be approved today that will introduce significant changes to the Catalan Tax Agency (ATC) . This agency was established in 2006 and has, until now, been responsible for Catalan and assigned taxes.

Now, the ATC will be the embryo of the future "own Treasury," and in 2028 it will assume the collection of personal income tax, as agreed upon in the last State-Generalitat Bilateral Commission. The meeting took place in July and served to begin to specify the major prerogative that ERC secured in exchange for facilitating Illa's investiture in August 2024, which was precisely the implementation of a "bilateral" financing model for the Generalitat with the long-term transfer of all taxes currently under the jurisdiction of the state Tax Agency.

Both "bilateral" financing and the "own treasury" require a series of legal changes, since the current legal framework does not allow the Generalitat to assume these functions.

The first administration to activate the reform machinery will be the Generalitat, today, with a royal decree amending Book Two of the Catalan Tax Code, which regulates how the collection, management, and inspection of the various taxes are structured. This text was approved in August 2017, shortly before the failed unilateral declaration of independence that the former CDC, ERC, and the CUP promoted in the regional chamber.

On the one hand, the decree-law will give the ATC autonomy to recruit personnel. This is a key step in further strengthening its technical and human resources. In this regard, the Government has been preparing several public employment announcements for some time, and what will be done today is to create two specific groups of civil servants. Specifically, one of tax technicians and another of senior IT technicians specializing in taxes.

The approval of this regulatory change for today was announced at the end of July by Illa's government following an agreement reached by the Republicans. The agreement came after the joint committee between the State and the Generalitat (Catalan Government), in which the government committed to processing several legal reforms in the coming months to make new financing for Catalonia possible.

Furthermore, a study commissioned by the Catalan government from an Indra subsidiary was also released. This study, in addition to highlighting that the ATC currently lacked the human resources and software necessary to take on new taxes, proposed a multi-phased schedule. Thus, if the ERC ousted Illa in 2024, the first personal income tax campaign the ATC would take on would be that corresponding to this year, which will be collected the following year. Finally, the change is scheduled for 2028, although the Generalitat's participation will be strengthened next spring.

The objective is none other than to allow ATC staff to gradually gain experience in tax categories with very complex regulations, such as Personal Income Tax, but also Corporate and Special Taxes, which, according to the commitment the PSOE government has made with Illa and ERC, will also eventually be transferred.

However, the Socialists currently do not have a guaranteed majority in Congress for all the legislative reforms that need to be processed. Last weekend, Junts accused Illa of "denationalizing" the Generalitat (Catalan government), and a few days ago, its president, Carles Puigdemont , promised a hot autumn, without specifying what his threat would entail.

The neo-convergents aren't the only question mark facing the Sánchez government regarding parliamentary arithmetic. Compromís is deeply divided over the debt relief that the Council of Ministers will submit to Congress in early September. Of the two parliamentarians in the Valencian coalition, Àngela Micó has already stated that she will vote against it because it is a "discretionary" agreement between the Executive and the pro-independence parties. Micó broke with Sumar and is now part of the mixed group.

Despite the decree law that the Generalitat will approve today, there is not only concern within Junts' ranks about potential non-compliance by Pedro Sánchez. Last week, the president of the ERC (Republican Socialist Workers' Party), Oriol Junqueras, admitted that he does not trust the First Vice President and Minister of Finance, María Jesús Montero, because she is the PSOE's top candidate for Andalusia, which would be the region hardest hit if the agreement with the Republicans goes through.

The agreement includes a reduction in inter-territorial solidarity , a quota that would compensate the State for the powers it provides in Catalonia, as well as the government's commitment to continue its investment agenda. The council of experts appointed by the Generalitat is expected to announce the results of the new model throughout the fall.