The financial autonomy of the municipalities and the Valencian Parliament

SUMMARY

In the first half of the fourteenth century and on countless occasions, the Crown granted the leaders of the City of Valencia authorization to collect indirect taxes as a means of collecting the subsidies allocated to its military needs. The ratification of fiscal autonomy can be related to the Crown's interest in gaining control of municipal resources as a way of demanding donations in order to accomplish its policies.

The main reason for the royal privilege to raise taxes in favour of the cities was the extensive expenses caused by the conquest of Corsica and Sardinia during the reign of James II. The Kingdom and the city of Valencia came to the aid of the monarch because they were interested in trading with Sicily and these two islands were impeding trade routes. To make things easier, Alfonso IV granted them a privilege to levy taxes on the grain and meat trades and on merchant shipping within the municipal territory of the city of Valencia. The municipal tax on meat and grain was used as a model for the tax approved in the Cortes of 1329, extending it to exports everywhere in the Kingdom of Valencia. The tax approved by these Cortes, agreed in order to collect the subsidy offered to the monarch, was the first general tax validated in the Cortes following the model of the exisiting municipal tax. To mark the occasion of the war against Castile, Peter IV took a decisive step in 1363 and extended the capacity to levy taxes to all royal towns and cities. The municipalities turned indirect taxation into one of the basic pillars of their economy.