Gross tax bases

The tax bases of the main taxes grew by 6.1% in 2018 (5.2% in 2017). In 2018, the upward trend that has characterized the evolution of these bases over the last five years continued. With this growth, the bases exceed the maximum reached in 2007. Chart 1.7 shows these bases in comparison with nominal domestic demand, which, as noted, is one of the aggregates closest to the evolution of the bases. In 2018, the growth of both variables was different due to the different behavior of the bases linked to income and those linked to expenditure, especially in the second half of the year.

The bases linked to income grew by 6.3% in 2018, compared to 4.6% in 2017. Growth was strongest in the second half of 2018, following the increases in public salaries and pensions approved in the Budget and the improvement in corporate profits. However, from the perspective of expenditure , the bases showed a high pace, but slightly lower than that of the previous year (5.8% in 2018 and 6.1% in 2017), in line with the profile of domestic demand.

In 2018, household gross incomes grew by 5.2%, more than one point above the growth recorded in 2017. In evolution, two periods are clearly distinguished: the first half of the year with increases of around 4.7% and the second with increases of 5.6%. The basic reason for this very different behavior was the increase in public salaries and pensions.

Indeed, wages and pensions, which had maintained stable growth in the first part of the year, grew at a higher rate from July onwards (Chart 1.10). The wage bill rebounded in the fourth quarter when public sector employees' wage increases were implemented and arrears were paid. For the year as a whole, the increase was 5.4%, one point more than in 2017. In pensions, the first half of the year ended with an increase of around 3%, while in the second half growth rose to almost 5%. In the year to date, the pension fund grew from 2.5% in 2017 to 4.4% in 2018.

In the rest of household income, the behavior of capital income should be highlighted in two ways. On the one hand, the set of income (furniture, leases and capital gains) grew by 5.6%, an increase lower than that of 2017 (Table 2.1). The reason for this slower growth was the evolution of capital gains, which increased by around 30% in 2017 and by only 2.7% in 2018. On the other hand, in 2018 there was a recovery in capital gains. These incomes had been declining almost without interruption since the beginning of 2012, but in the central months of 2018 the trend was broken (Chart 1.11). The main reason for the recovery was the increase in dividends and income from private debt securities.

It is estimated that the consolidated tax base for Corporate Tax grew by 12.8% in 2018, an increase practically equal to that expected for profits (12.9%). The forecast is made based on the fractional payments declared by large companies and tax groups, which are the taxpayers obliged to make advance payments for the profits obtained throughout the year. The analysis of these payments shows that the improvement observed in them was concentrated in a few consolidated groups, while in the rest of the companies the benefits moderated as the year progressed.

As regards the expenditure-related bases, they showed high growth overall, but slightly below that experienced in 2017. The final expense subject to VAT closed 2018 with an increase of 5.6% compared to 6.4% the previous year. Taking into account price developments, the slowdown was mainly of a real nature (Chart 1.13). The loss of intensity compared to 2017 occurred mainly in the second half of the year. By component, it was household consumption spending that put downward pressure on the whole. On the other hand, the expenditure of the AA.PP. grew more than in 2017 and the increase in spending on new housing remained practically the same as then.

Finally, the value of consumption subject to Excise Taxes grew by 6.8% in 2018, above the 4.7% in 2017 (Tables 1.3 and 5.1). Unlike what happened in 2017, the improvement is not explained by the increase in energy prices (on average, they rose approximately the same in 2017 and 2018; Chart 1.14), but due to the irregular evolution of physical consumption of alcohol and tobacco in 2017 and, to a lesser extent, due to the better performance in 2018 of gasoline, diesel and electricity consumption, although part of this was a consequence of factors that were not strictly economic, such as temperatures and some atypical electricity consumption.