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The IEB publishes the updated version of its ‘Regional Financing Map’

Among Spain’s regions, Madrid, the Balearic Islands and Catalonia were the ones that collected the most taxes per person in 2019. but in terms of the resources received these regions were ranked eighth, ninth and tenth overall. The communities that benefited the most were Cantabria, La Rioja, Extremadura, Aragón, Castile-León, Asturias and Galicia. These figures reflect a trend that has been broadly repeated since the current tax model was introduced in 2009.

These data are presented in the sixth update of the IEB’s Regional Financing Map. The map shows the evolution of the resources available to each region per inhabitant after the application of the levelling mechanisms and adjustment funds incorporated in the model.

The IEB’s Regional Financing Map shows that some of the communities with the highest fiscal capacity per inhabitant obtain a volume of resources that is well below the average. It indicates that the levelling mechanism, known as the Fundamental Public Services Guarantee Fund, fulfils the objective of reducing the distance between the communities with the highest and lowest fiscal capacity without altering the initial order. However, the application of the adjustment funds to promote sufficiency, competitiveness and cooperation ends up generating distortions in the distribution of resources. According to the IEB researchers, this situation may justify a “revision of the model”.

The IEB’s Regional Financing Map is a tool that offers an updated system for evaluating and analysing the current regional financing model which has been in operation since 2009. The sections of the web contain data on the amount of the taxes assigned by the central government to each autonomous community, and the resources resulting from their participation in the levelling mechanism (the Fundamental Public Services Guarantee Fund) and in the sufficiency, competitiveness and cooperation funds destined to adjust the model

The map illustrates the four situations that occur after the application of the model: regions whose contribution to the tax revenue per inhabitant is below the average, but whose receipt of resources after the application of the funds is above the average; communities whose contribution is below the average and continues to be so after the application of the model; communities with contributions above the average and which benefit still further after the application of the model; and communities whose contributions are above the average but which receive resources below the average.