Tax revenues and their comparison with the Budget

Tax revenues in 2018 were lower than budgeted by 1.33 billion euros, 0.6% of the expected revenues. The negative deviation was concentrated in indirect taxes and fees (-2,768 million). In Chapter I, however, revenues exceeded expectations (+1,438).

The evolution of deviations over the last 15 years is shown in Chart 1.17, while the deviation by figures in 2018 can be analysed with Chart 1.18 in which the red line indicates the situation in which the deviation from the expected figures is zero.

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

There was also a positive deviation in corporate tax (580 million). The reason for this deviation is a better-than-expected development of the instalment payments, estimated at around 1 billion. These higher revenues were offset by a higher than expected amount of returns.

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

Revenue 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, revenues did not reach the figure estimated in the Budget (-123 million) due to the unexpected fall in rates and, in particular, the sharp drop in the Fee for the use of inland waters.