Accrued taxes and tax revenues
In 2018, the taxes accrued grew by 5.7% (6.1% if only the four main figures are included; Table 1.4). In both cases, growth is very similar to that recorded in 2017 (5.9% for the total and 5.8% for the main figures). The increase in taxes accrued is similar to that recorded in tax revenues, once the impact of the implementation of the SII (5.4%) was eliminated in 2017 and 2018. This indicates that the differences caused by the different timing of the recording of income (the accrual period in the first case and the income or refund period in the second) had little influence, in aggregate terms, in 2018, as can be seen in Chart 1.16, which illustrates the process of generating tax revenue from the tax base.
The IRPF accrued grew by 5.3% in 2018, below the 6.2% of the previous year (Table 2.1). Given the stability of the effective rate, growth was due exclusively to the favourable evolution of income. The lower increase in the tax accrued compared to 2017 is a consequence of the negative impact, indicated in the previous section, caused by the extension of family deductions. This fact also explains the difference in 2018 between the variation in the total tax (5.3%) and without differential quota or family deductions (6.3%).
The main component of the tax, withholdings on earned income, grew by 6.5% in 2018 (4.5% in 2017). This is the same rate that was recorded for wages (Table 2.3) and which, as a novelty in 2018, came not only from the increase in employment, but also from the increase in the average wage and the rise in the effective rate that it entailed. For its part, withholdings on pensions grew by 6.7% (5.3% in 2017). The growth of the type that in recent years explained more than half of the growth in withholdings, in 2018 was limited by the extension of the reduction for work income that favored the lowest pensions, but, in exchange, the increase approved in the Budgets led to a significant increase in the bases.
In 2018, personal income tax revenues rose to 82,859 million euros, 7.6% more than in 2017. The discrepancy between the growth in tax accrued and the growth in revenue is justified by the annual declaration that includes each measure. The accrued tax includes the 2018 declaration to be settled in 2019 and which, as seen, is expected to have worse results than in 2017 due to the increase in family deductions, while the income contains the results of the 2017 declaration submitted in 2018 and which contributed almost 1,000 million euros to the growth in collection.
The Corporate Tax accrued is expected to grow by 15.1% in 2018 (11.1% without the differential rate that will be filed in July; Table 3.1). The main component of the tax is split payments, which grew by 11.9% in 2018. The behaviour of these payments was very different in the different groups of taxpayers (Table 3.2). In large companies and consolidated groups, which pay taxes according to their profits, the increase in payments reached 13.5% (18.3% in groups and 5.4% in companies not belonging to groups), well above what was achieved in 2017. The improvement occurred in a very concentrated manner in the groups and, in particular, in a small number of them; In the rest of the companies, growth in 2018 was lower than in 2017. It is also worth highlighting the increase in the contribution of the minimum payment in these results. For their part, payments to SMEs (which are taxed according to the last annual payment submitted) grew by 2.3%, which represented a sharp contraction compared to the growth of the previous three years.
Tax revenues increased to 24.838 billion, 7.3% more than in 2017. The difference with respect to the tax accrued is a consequence of the advance in the rate at which refunds are made. If this element is corrected, the revenue growth would be 12.8%, a figure closer to accrual.
In terms of cash, the two determining elements in 2018 were the evolution of the fractional payments mentioned above and the 14.1% increase in returns (Table 7.2). It should be noted that these refunds do not arise from the activity in the year, but are linked to declarations and settlements from previous years.
The VAT accrued grew by 5.6% in 2018, the same increase as the subject expense (Table 4.1). In 2018, there were changes to some rates, but their impact on the tax as a whole is marginal.
Tax revenues from VAT amounted to 70,177 million, 10.3% more than in 2017 (Table 4.2). The figures are affected by the impact of the SII. If corrected, growth would be 3.7%. The difference between accrual and cash arose mainly for two reasons: the high volume of refunds made corresponding to the previous year and the adjustments with the regional territories, and the decrease in income from previous periods (a consequence of the changes in the management of deferrals that took place in 2017 and whose effects were carried over into 2018).
The Excise Taxes accrued grew by 1.9% in 2018, compared to 0.2% in 2017 (Table 5.1). As mentioned when discussing the bases, the increase is not explained so much by the positive evolution of consumption, but by the irregular behaviour of consumption in 2017, particularly in tobacco and alcohol. In the tax accrued on Hydrocarbons, the figure with the greatest weight in the set of these taxes, growth in 2018 was 1.8%, below the 2.6% achieved in 2017 (Table 5.4). The reason for the lower growth was the decrease in natural gas consumption (a decrease associated mainly with the lower use of natural gas in the generation of electricity) and, in the last part of the year, the elimination of the tax on this product and on diesel and fuel oil for the same purpose introduced by Royal Decree-Law 15/2018. In the most consumed products, gasoline and diesel, growth in 2018 was similar to that of the previous year (2.4% and 2.1%, respectively), although the result was obtained, above all, due to the increase of almost 5% in heating diesel, more volatile and less linked to the general activity of the economy. The Tobacco Tax grew by 2.4% (-4.8% in 2017; Table 5.5). The irregularity of the series disturbs the diagnosis that can be made of this figure in which consumption and accrued tax have practically stabilized since 2013 with 2.1 billion packs and 6.6 billion euros per year. The accrued Electricity Tax increased by 4.4% in 2018, almost 3.5 points more than in 2017 (Table 5.6). Most of the growth was due to irregularities in the billing of some companies that occurred in May 2017, making it appear that consumption grew more in 2018 than it actually did. The Coal Tax registered a sharp decrease of 15.1% (Table 5.7) when compared to the high level of revenue that had been achieved in the tax in 2017 coinciding with the problems of drought and the use of coal as a substitute for hydrographic sources. Still, and looking at the bigger picture, 2018 revenue was only slightly lower than the 2014-2017 average of $275 million a year. Finally, in alcohol taxes, revenues grew by 1.8% (0.5% in 2017) due to the recovery in Alcohol and Derived Beverages and despite the slowdown in beer consumption (Tables 5.2 and 5.3).
In 2018, tax revenues from special taxes totalled 20,528 million, which was 1.1% more than in 2017. The small differences with the accrual, concentrated especially in tobacco and alcohol, are still the result of the shift to 2017 of the income accrued in the last months of 2016, following the rate increase at that time.
The rest of the tax figures other than the four main ones accounted for revenues of 10,284 million, 4.8% more than in 2017. Virtually the entire increase is due to the Non-Resident Income Tax . In 2018, its income registered a growth of 17.2%, which is explained by the evolution of income subject to withholding (especially due to the improvement in dividends) and by the result of the annual declaration (Table 6.1). On the positive side, the environmental taxes of Chapter I (3.6%) and the Other income of Chapter III (6.4%) also stood out. On the negative side, it is worth noting the fall in income from Fees (-11%; Table 6.5) as a result, mainly, of the decrease in income from the Fee for the use of continental waters for the production of electrical energy (-43.9%), affected by the drought of 2017 (a year that was settled in 2018) and despite the increase in the rate that came into force in 2018.