Tax revenues and their comparison with the Budget

Tax revenues in 2018 were lower than budgeted by an amount of 1,330 million, 0.6% of expected revenues. The negative deviation was concentrated in indirect taxes and fees (-2,768 million). In Chapter I, on the other hand, income exceeded expectations (+1,438).

The evolution of the deviations in the last 15 years is shown in Graph 1.17, while the deviation by figures in 2018 can be analyzed with Graph 1.18 in which the red line indicates the situation in which the deviation with respect to the figures predicted is zero.

In personal income tax, income was 1% higher than budgeted (803 million). The deviation is mainly due to higher withholdings for labor income which, in turn, is explained by a growth in the average effective rate higher than that initially expected based on the average remuneration forecasts included in the budget scenario. In addition, there was also more income in the result of the annual declaration, even though it includes the refunds of the tax paid for maternity benefits (94 million) that derive from a ruling after the preparation of the Budget.

In Corporate Tax there was also a positive deviation (580 million). The reason for this deviation is a better-than-expected evolution of installment payments, estimated at around 1,000 million. These higher revenues were offset by the higher amount of refunds made than expected.

In VAT, revenues fell below budgeted amounts by 1,398 million. The deviation was a consequence of the underestimation of the returns to be made in 2018.

Income from Special Taxes was also lower than expected (1,084 million), mainly due to a worse than expected performance in the consumption of hydrocarbons, tobacco and electricity.

Finally, in Chapter III the income did not reach the figure estimated in the Budget (-123 million) due to the unexpected drop in rates and, especially, due to the sharp decrease in the Canon for the use of continental waters.