Local financial autonomy

Abstract

The constitutional forecast on the key local financial autonomy on which political autonomy is based has had a uneven legislative development. In the area of public expenditure, this autonomy has been significantly strengthened. By contrast, in the area of revenue, financial adequacy depends substantially on state sources and to a lesser extent than the corresponding Autonomous Treasury. The local tax system needs of an in-depth review to makes it fully adecuate for financing of their competences. Judicial decisions highlight the need for such modification of the local tax system. What has happened with the Judgements on Capital Gains Tax is a clear example of this.