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Aragón expects an extra 500 million for its budget thanks to VAT and income tax collection

Aragón anticipates an extra 480 to 500 million for its budget from VAT and income tax, though the finance minister warns of lower average receipts.

Álvaro Sáez FerrerÁlvaro Sáez Ferrer··4 min read

The Government of Aragón expects to receive between 480 and 500 million euros in additional funding for the next regional budget, according to data from the Council of Fiscal and Financial Policy. The finance minister, Roberto Bermúdez de Castro, warns that the community usually receives less than the average.

The Government of Aragón will have an extra cushion of between 480 and 500 million euros to prepare its upcoming regional budgets. This was announced by the finance minister, Roberto Bermúdez de Castro, after learning about the forecasts for state transfers, which will increase by an average of 8% to 9% for all autonomous communities. The increase is supported by improved VAT and income tax collection, although Bermúdez de Castro has urged caution: "Aragón usually receives less than the average," he reminded.

A range of income subject to caution

The minister's calculations are based on information provided at the Council of Fiscal and Financial Policy (CPFF), the body that brings together the Ministry of Finance with the autonomous communities. It was reported there that the transfers —the advances that the state transfers to the regions based on their expected collection— would grow by around 8-9% on average. However, Bermúdez de Castro highlighted a relevant fact: last year, the average increase was 10%, but Aragón only received 7%. Therefore, the minister prefers to operate within the lower range of his estimates, between 480 and 500 million.

The increase in income comes at a key moment for preparing the regional accounts for 2027, which are already underway. The various departments of the Aragonese government are presenting their needs, which the minister has described as their "letter to the Three Wise Men." Once the spending ceiling and final transfers are known, internal negotiations will begin to allocate the funds.

Personnel spending consumes much of the increase

However, not all the extra money will be available for new investments. Bermúdez de Castro has reminded that the state has set a spending growth limit of 4% for the next fiscal year, which already limits possibilities. Additionally, in 2026, civil servants' salaries will increase by 4.5%, plus an additional 0.5% from the previous year. "That increase would consume almost the entire expansion," the minister pointed out. Thus, the room for manoeuvre to increase spending in other areas will be limited, despite the increase in income.

The minister took the opportunity to criticise the functioning of the CPFF. Although he acknowledged that the attitude of the new finance minister, Arcadi España, "is nothing like" that of his predecessor, María Jesús Montero, he lamented that these councils are not "real negotiation bodies." "Nothing gets resolved there," he stated, referring to the lack of progress in reforming the regional financing system.

Reform of regional financing in limbo

A working meeting of the CPFF is scheduled for next Tuesday, the only one before the formal Council, where the reform of the regional financing system will be addressed. Bermúdez de Castro has criticised that there have not been fifteen prior meetings with all communities to seek an agreement, as would be desirable. "That is what should be done," he concluded.

For Aragón, the improvement in transfers is good news, but the minister insists that the community starts from a disadvantageous position in the current system. As long as the model is not reformed, Aragón will continue to receive less than it would be entitled to based on population and fiscal effort. The regional budget for 2027, which will be presented in the coming months, will be the first test of how these figures translate into concrete policies.

For now, the departments are already working on their proposals. The minister has indicated that, once the spending ceiling and transfers are known, negotiations will take place with each department to prioritise allocations. The salary increase for civil servants will be the first burden, but the Aragonese government hopes to allocate part of the increase to areas such as health, education, or social services.

Álvaro Sáez Ferrer

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Álvaro Sáez Ferrer

Redactor

Economista por ICADE y una de las pocas personas que disfruta leyendo la ley de presupuestos. Cafetero, padre a tiempo completo y azote de la letra pequeña; en Iber Empresa escribe de economía y fiscalidad.