Your 40-year professional career in as Head of the Tax Regulations Service of the Provincial Treasury of Alava has run parallel to that of the Economic Agreement, how do you consider that the Economic Agreement has evolved?

There are several stages. The first one I knew was quite peaceful, although this was mainly due to the fact that the regulatory powers of the Foral Institutions were small, i.e. they did not have the powers they have today.

This was followed by a rather conflictive period characterised by the judicialisation of the agreed text. This situation was patched up by means of the so-called “fiscal peace”. However, it was not until the judgement of the European Court of Justice and the so-called “shielding of the Economic Agreement” (wrongly called because it only tries to give the same treatment to the Foral Regulations as to the Laws approving the Taxes for the common regime territory) when the situation has returned to a reasonable course in which the agreed text is not under permanent debate.

In this same Newsletter we announce that Ad Concordiam is going to publish the results of a survey on the knowledge of the Economic Agreement in the university environment. What is your opinion on the knowledge of the Economic Agreement in the Basque society?

I believe that a distinction must be made between knowledge of its existence, of which there is, at least in the Basque Country, ample knowledge, and knowledge of its content.

In the latter case, a distinction must be made between the political class and the citizenry. As far as the citizenry is concerned, I do not think it should be necessary to have a high level of knowledge of it either, apart from the basic elements, if necessary.

This is not so in the case of the political representatives who, having to decide on its content, should be required, they themselves should be required, to have an acceptable knowledge of the agreed text, its history and its genesis and alterations. It is, for instance, revealing that in the discussions in the Spanish Parliament, not to mention in the press, certain political representatives, spokespersons of their parliamentary groups, can make such obvious mistakes about the Economic Agreement that reveal a lack of the most elementary knowledge about it.

I believe that, when you have political responsibilities, knowledge is the cornerstone of the rationale for the decisions you take.

One of the principles of the Economic Agreement is the fiscal harmonisation between Araba, Bizkaia and Gipuzkoa. You have experienced the harmonisation processes at first hand, how do you consider that this harmonisation has been carried out since ?

Tax harmonisation between the three foral territories is not, nor should it be, synonymous with uniformity, so that it is possible, and this is what happens in practice, that there are legislative differences between them.

To properly understand this harmonisation, it is necessary to place it on the same level as the harmonisation that must exist with the state, which moves in the realm of the mere enunciation of general principles.

It can be affirmed that the differences that currently exist between the regulations of the three foral territories cannot be described as substantial, since the three foral legislations are essentially the same.

This harmonisation has been possible thanks to the joint work of the Provincial Councils, which have made significant efforts to harmonise the basic issues of the tax system.

On the other hand, this harmonisation is not only necessary, but also desirable, because in the territorial areas in which they operate and which have important similarities, it would be difficult to understand, especially from the perspective of taxpayers, different tax regimes.

Recently, there has been some controversy over whether some autonomous communities are engaging in fiscal dumping. What is your opinion on this controversy?

During the period when the 1981 text was in force, there was a time when the same observation was made by the Foral Institutions.

These Institutions argued that what was being done was to exercise the competences derived from the Economic Agreement. And this was indeed the case. The regulations issued by the General Assemblies of the three Historical Territories were nothing more than the exercise of the regulatory powers they had at their disposal, an exercise which aimed at establishing a certain tax system.

Consequently, and from this perspective, I do not consider that it is possible to speak of fiscal dumping when other entities with legislative power establish their own tax model, as long as this responds to the logical principles that should inspire the exercise of legislative functions.

In other words, if I did not consider the accusations that were once made against the exercise of regulatory powers by the Foral Institutions to be correct, I do not understand the opposite situation either.

The gender perspective is also present in taxation. Do you consider that the Economic Agreement is a valid instrument to implement equality policies?

Clearly, equality policies can, and should, be developed in all fields. The tax system is no stranger to this need.

The Foral Institutions have broad legislative powers to regulate certain taxes.

In this respect, it should be noted that in Alava, for example, three measures were approved last December with this aim in mind. Thus, to cite two of them, a greater tax incentive was established for the start-up of economic activities by women in towns or areas at risk of depopulation, and the application of the deduction for job creation was made conditional on the non-existence of wage discrimination between women and men.

That said, it must be recognised that there are other areas, such as labour, advertising, public procurement, education, etc. where the measures that can be adopted are more far-reaching and these are the areas that should be a priority for public action through the adoption of innovative and daring measures.

In the field of taxation, due to the objective and principles that underpin it, the field of action may be more limited. In this sense, there are studies in the doctrine that in my opinion are excessively partial and do not deal with the problem of equality in the field of taxation as a whole, in such a way that they provide solutions that quickly come into contradiction with elements that must be taken into account when establishing a tax system based, among other principles, on the principle of economic capacity.

One of the issues most frequently raised when talking about taxation in the Basque Country as a whole is the tax burden. In your opinion, is there more or less tax pressure in the Basque Country than in the rest of Spain?

During the years in which the Provincial Laws passed by the General Assemblies of Araba, Bizkaia and Gipuzkoa were systematically appealed before the Courts, one of the arguments used in the appeals was precisely the infringement of the principle contained in the Economic Agreement that the tax burden of the Basque Country should be similar to that of the State.

Courts have consistently rejected this argument, mainly on the grounds that the lower or different tax burden must be proven.

In the Finance Minister’s last two speeches on the occasion of the presentation of the last two amendments to the agreed text in the Cortes Generales, he expressly acknowledged that the tax burden in the Basque Country is higher than the State average.

But in any case, I believe that to talk about the tax burden in isolation, without comparing it with the provision of services received by society, is to treat the subject without one of its fundamental parts. The higher or lower tax burden should not be analysed, at least by society, without linking it and analysing it directly with the services provided by the Administration. Thus, a low tax burden may not be perceived positively by society from the point of view of the services provided by the public authorities.

As an expert on the subject, you have made an important contribution to the scientific doctrine on the Economic Agreement. One of the books you have written deals with the evolution of the Economic Agreement through its different legal texts. What can you highlight from this publication?

This book is an overview of the basic texts that have been approved by the different Economic Covenants since the law abolishing the Fueros in 1876.

Throughout the successive renewals of the Economic Agreement, it is possible to appreciate the evolution of the Agreement from a system in which the Foral Institutions had little, or very little, to say in its formulation, at least from the legal point of view, to the current system based on the agreement of all the signatory parties to the Agreement.

Another of the topics under discussion is the quota that the Basque Country pays to the State. What can you tell us about the calculation of the quota?

Several factors are involved in determining the quota. I will mention three of them by way of example, but there are more. The first is the determination of the burdens assumed by the State. The quantification of these charges is done on the basis of the State’s expenditure budget, in the determination of which the Basque Country has little say, or at least not as much as it would like. Therefore, on this point, which is rarely highlighted by the doctrine, the Basque Country is, let us say it in a way that is easy to visualise, somewhat in the hands of what the State itself decides.

The second element is the state deficit. On this element there is doctrine in one sense or another. There are those who consider that it operates incorrectly, and there is another part of the doctrine that takes the opposite view.

The third element I would like to highlight is the imputation rate, the famous 6.24%. It is true that, given that it tries to represent the specific weight of the Basque Country in the State, it seems reasonable to consider that it can hardly be the same since 1981. But there are also studies that show that at some points it has been below and at others above the aforementioned 6.24%.

In any case, it should be remembered that this coefficient may be subject to modification by means of an agreement between the signatories of the Economic Agreement, as well as other issues such as, for instance, a greater participation in the European Institutions or the assumption of regulatory competences in the field of Value Added Tax.

What do you think about the controversies raised by the Economic Agreement, especially about the need to defend it?

Personally, I believe that the best way to defend the Economic Agreement, assuming that this term can be used, is to exercise the competences it contains.

At the same time, I consider that the defence of the same should not be made solely and exclusively from the legal point of view, in the sense of considering that it is protected by the 1978 Constitution and expressly mentioned in the 1979 Statute of Autonomy, but also from the perspective of History, which does not begin, precisely, after the abolitionist law of the Fueros of 1876. The competence of the Haciendas Forales has been rooted in history for a long time.

Your book on the Economic Agreement 2005-2020 will soon be published. What summary can you give us of it?

The book is a continuation of the book of the same title published more than 15 years ago by Ad Concordiam, whose authors are Javier Muguruza and Alberto Atxabal, but, logically, it refers to an earlier moment in time.

This publication contains the different modifications that have taken place in the Economic Agreement during the period between 2005 and 2020.

In addition, it attempts to compile the authors’ doctrine, by means of a review of the same, as well as the sentences of the Courts of Justice and the resolutions of the Arbitration Board during this period of time. All of this is ordered and referenced for each of the articles that make up the agreed text.

In this way, it is possible to obtain a fairly complete picture of the course of the concerted text during this period of time.

Finally, how are you facing this new stage in your life?

It’s not that I have a lot of experience in retiring but I understand that now I will be able to do things that I couldn’t do until now as I will be able to do them now. I have many hobbies so I will try to develop them. One of them, for example, is reading. After many years of reading legislation and court rulings I hope now to be able to enjoy good literature.