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  • The Catalan Government Approves Four Decree-Laws with Urgent Fiscal, Social and Cultural Measures to Mitigate the Effects of the Pandemic
The Catalan Government Approves Four Decree-Laws with Urgent Fiscal, Social and Cultural Measures to Mitigate the Effects of the Pandemic

The Catalan Government Approves Four Decree-Laws with Urgent Fiscal, Social and Cultural Measures to Mitigate the Effects of the Pandemic

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The Catalan Government Approves Four Decree-Laws with Urgent Fiscal, Social and Cultural Measures to Mitigate the Effects of the Pandemic

  • The Catalan Government approves an income tax deduction for low incomes
  • The Executive Council approves a decree-law to increase the protection from evictions for the most vulnerable groups
  • The Catalan Government allocates 102.6 million euros to social measures
  • A package of 8.4 million euros for culture is given green light
  • According to Budó, the four decree-laws approved yesterday are "an example of the central effort this Government is making to alleviate the negative effects of the pandemic"
The Catalan Government Approves Four Decree-Laws with Urgent Fiscal, Social and Cultural Measures to Mitigate the Effects of the Pandemic

The Minister of the Presidency and Government spokesperson, Meritxell Budó, explained at the press conference following yesterday’s meeting of the Executive Council that the Government approved four decree-laws with urgent tax, social and cultural measures. "These measures aim at facing the crisis we are going through in economy, social affairs and health”, Budó said.

First of all, the Catalan Government has given green light to a new decree-law containing urgent measures in fiscal matters with a double objective: on the one hand, to respond to the economic difficulties of the tourism sector in Catalonia as a result of the economic effects of the pandemic; and on the other hand, to protect workers with greater job insecurity; suspended temporarily, unemployed or having various contracts due to the current situation caused by Covid-19. In this sense, the Executive Council has agreed on postponing again the implementation of the tax increase on stays in tourist establishments and has approved a regional deduction in the personal income tax for low incomes, Budó explained.

The current personal income tax regulations state that taxpayers with an annual gross income lower than €22,000 from the same payer are not required to submit the declaration. However, if the person has two or more payers, the declaration must be submitted in case of annual gross incomes of €14,000 or more. This is the case of workers who in 2020 will have received their salary both from their company and the State, because they were suspended temporarily due to Covid-19 or became unemployed. 

To prevent these workers from being penalized when filling the tax return for 2020, the Government has created a regional deduction of personal income tax equivalent to the difference between the Catalan and state quotas if the difference is positive. In other words, the Catalan Government will no longer charge for the difference corresponding to its quota. Budó explained that the aim is to “keep this measure in time, because it could benefit about 250,000 people in Catalonia and the loss of income for the Catalan Government would be about 16.3 million euros for the budget 2022”.

With regards to the tax on stays in tourist establishments, the implementation of the tax increase in the city of Barcelona is postponed until 1 June 2021. It was planned for last July, but the Parliament had already agreed on postponing it until 1 January 2021. The health situation makes it difficult to predict that tourist establishments will operate normally in January, so the Government has agreed on postponing these increase again. The impact on the tax collection of this measure represents an additional loss of 2.9 million euros in relation to the current situation.

The Executive Council approves a decree-law to increase the protection against evictions for the most vulnerable groups

The second decree-law approved strengthens the protection of the most vulnerable groups against possible evictions while the state of alarm lasts or any other restriction of mobility for health reasons is in force, the government spokeswoman explained. “Therefore, evictions will be explicitly suspended until the big tenant or the financial entity owning the house offers the social rent to which he is obliged by law, which already establishes the obligation to offer social rent before pursuing an eviction" said Budó.

The decree-law approved today, still to be validated by the Parliament, modifies some precepts of the Law 24/2015, of urgent measures to face the emergency in the field of housing and energy poverty. The law established measures to prevent evictions of people or family units with no alternative housing of their own when in a situation of risk of exclusion. The measures include the obligation of big tenants to offer a social rent proposal before filing a lawsuit for foreclosure or eviction for non-payment of rent.

Subsequently, the Decree-Law 17/2019 extended the obligation to offer a social rent before urging an eviction in case of expiration of the rental agreement and also to the people who occupied an untitled apartment and met the requirements. The situation of vulnerability of people or families at risk of residential exclusion is aggravated when the legal obligation to formulate a social rent proposal is breached. The situation becomes particularly serious in the current context of mobility restrictions established to confront Covid-19. The decree-law aims to ensure that people at risk of residential exclusion can remain at home for the duration of the state of alarm. The decree-law does not affect tenants renting apartments owned by small tenants.

The ban on evictions of vulnerable people without alternative housing will be extended during the period of the state of alarm or a measure that involves restrictions on freedom of movement for health reasons. This situation of vulnerability must be proven by a report from the corresponding social services. Therefore, it is a protection measure at a longer term than expected in the Royal Decree Law 30/2020  , approved by the State. The Minister of the Presidency Meritxell Budó has called on the Spanish government "to go beyond the measures it has adopted so far". In this sense, the Minister has set an example in the field of evictions in which “the Spanish government can, as it did during the first state of alarm, suspend the execution of evictions for the duration of the new state of alarm, that is to say for six months, or it can transfer this competence to the Catalan Government".

The Catalan Government allocates €102.6 million to social measures

The third decree-law the Government approved establishes new extraordinary social measures for a global value of 102.6 million euros, which “aim to strengthen the social services system and care for various professional groups especially affected by the health crisis”, said Budó.

The Executive allocates €35 million to the increase in rates for the elderly, disabled and children: €20 million for the elderly, €7.5 million for the disabled and €7.5 million for the children. This is the fulfilment of the political commitment assumed with the budget 2020 law for public squares of the social services system and will have retroactive effects from January onwards.

The growth of rates ranges from 1.2% to 6.8% of the current price and must necessarily revert -as stated in the Government decree- in the improvement of working conditions and in wages of workers and the quality of care for users. In the case of children, more than €7.5 million for rates, €3.5 million are also expected to pay extra costs incurred by children's organizations for COVID-19. It will be a temporary and extraordinary compensation for children's organizations in a sector that, despite not having received the impact of the pandemic as strongly as other groups, it has made and continues to make an overexertion for emotional management and the quality of life of foster children and teenagers.

Extra help is also provided for foster families of minors under the guardianship of the Catalan Government. This is a supplement of €100 for receptions held between March 13 and December 31, 2020, regardless of the duration.

The decree-law also includes measures for freelancers, that is an additional €20 million. Up to 10,000 freelancers will benefit from a grant of €2,000 in a single payment to encourage the maintenance of their economic activity, as long as they are registered in the Special Scheme for Self-Employed Workers (RETA) or alternative mutual societies, either if they carry out their activity as a physical person or with a company that meets the following economic requirements: the taxable base of the last income tax return must be equal to or less than €35,000, and the net income from the activity in the first three quarters of 2020 must not exceed €13,125 euros.

On the other hand, this decree-law of social measures includes a new line of aids to professionals and technicians of artistic, visual, music, audio-visual and other cultural activities suspended due to the health crisis worth €3.6 million. People with an income of up to 18,555 euros between January and September will be eligible for this grant of 750 euros.

A reinforcement of €40.5 million has also been approved to face the increase of applications for the Guaranteed Citizenship Income. The Government has also taken measures in relation to the care of vulnerable groups, such as the flexibility of advance mechanisms or the justification of work centres for people with disabilities in order to speed up their financing, social and educational actions in areas with high immigration rates, economic aids for 2021 to hire home professionals and the flexibilization of gender-based violence programmes to adjust to COVID-19 situation.

8.4 million allocated to culture to mitigate the effects of the pandemic

Minister Budó explained that the fourth decree-law approved includes measures for culture in respond to the latest urgent measures adopted to face the crisis caused by COVID-19. These measures resulted in the closure of cultural activities, such as theatres, cinemas or auditoriums, both indoors and outdoors.

The government spokeswoman reminded that the Executive Council declared on 22 September that culture is an essential asset for the integral development of the individual and collective personality. "A statement that is part of a plan to preserve culture in the face of new restrictions and establish a series of actions that cover the cultural rights of citizens and industries and creative sectors," said Budó. Therefore, "urgent measures must be taken to ensure the survival of the culture and its agents," said the minister.

In this sense, two lines of subsidies have been opened for people, companies and entities in the cultural sector affected especially by the economic consequences of the health crisis. The Catalan Government has approved a first package of measures for culture, with a total amount of €8.4 million, which must be applied urgently to prevent the cultural system of our country to go bankrupt and continue to build a solid, socially and territorially cohesive society.

The first line of subsidies from the Catalan Institute for Cultural Companies aim to compensate the operating costs of cultural companies and entities during the health crisis caused by the pandemic, to the extent that it has caused economic damage to the recipients. €4.7 million will be allocated to this sector. Companies, whether they are natural or legal persons, and non-profit private entities with registered offices in Catalonia carrying out audio-visual or music activities or being independent distributors may apply for these subsidies. The other line of grants, from the Office of Support for Cultural Initiatives, aims to compensate for the losses caused by the cancellation of shows and cultural activities due to the health crisis. It has a budget of 3.7 million euros allocated to freelancers, civil and commercial companies and private non-profit organizations that carry out artistic professional activities.

Government spokesperson Meritxell Budó: "This package of measures is part of the central effort this government is making to alleviate the negative effects of the pandemic."

During the press conference, the minister explained that "this package of measures is an example of the central effort the Catalan Government is carrying out to alleviate the negative effects of the pandemic and the measures dictated to face it". For Budó, "the harsh measures that the government has decreed" are being successful and the health indicators prove it, and she has thus qualified them as "useful measures". "The sacrifice and effort we ask to citizens is not arbitrary, it aims to contain the pandemic and reduce its expansion" said Budó who once again thanked the civic and positive attitude of citizens.

"The government not only decrees measures to contain the Covid-19 but, as I said, works tirelessly to approve measures that help to alleviate the negative effects on the economy, production, social affairs and health of our country" said Budó. The minister assured that now is the time to take these measures because "after the pandemic it would be too late, and it would be more difficult to recover normality".