The Senate and the General Assembly have, with no votes of dissent from Citizens and Vox, definitively approved a draft law renewing the Basque Country’s quota for the five-year stretch 2022-2026. Alongside the amendments, the law includes a temporary contribution of 1,472 million euros from the Basque Country to the State for the base year, in addition to the Basque Concert and Economic Agreement with Navarra and the introduction of new taxes.
In this manner, the Upper House nearly unanimously dismissed the vetoes raised by Vox and Ciudadanos. Consequently, these three laws will receive final approval after publication in the Official State Gazette (BOE). The handling of the three pieces in the Cortes followed a single-reading, expedited process, bypassing committee hearings and presentations to shorten delivery times. The approach resulted from bilateral discussions involving the Basque Government and the Government of Navarra.
Regardless, Ciudadanos and Vox criticized the expedited procedure, filing a criminal complaint against it and denouncing opacity in quota calculations and perceived regional inequalities.
new taxes
The bill proposes amendments to the Economic Concert with the Basque Country, directing Basque authorities to oversee new levies such as a special tax on non-reusable plastic containers and a provisional solidarity tax, as defined by the Joint Commission on 27 December.
With regard to the Navarra agreement, the plan combines the tax on banks and energy companies with the tax on non-reusable plastic containers. The Foral Government aims to raise a total of 104 million euros in 2023 and 2024.
Regarding a new tax on large fortunes, Navarra will apply it under its own arrangements, but this will not be enforced in practice since the Inheritance tax remains active within the Foral Community.
Concerning temporary liens on energy firms and financial institutions, Navarra is set to receive 1.6% of all Spanish revenue in 2023 and 2024. In addition, the Foral Community will take full responsibility for defining and administering State aid funded by the collection of these taxes.
basque quota
On the Basque quota, the five-year framework maintains the Joint Commission meeting between the central administration and the Basque Country. The imputation index remains at 6.24%, and the Basque Country’s provisional contribution to the State for the base year is set at 1,472 million euros.
Overall, the new five-year quota methodology for 2022-2026 results in a payment amount very close to the Basque Country’s current contribution for the preceding period. It should be noted that active employment policy costs are not embedded in this base quota as a permanent liability; rather, they are accounted for annually as a compensation against the liquid quota owed to the government.
The final quota figures for 2021 are 1,403 million euros, distributed between financial compensation (final 2021 and provisional 2022) and the assessment of active employment policies (firm 2021 and provisional 2022).