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Fiscal year 2018

Tax revenues and their comparison with the Budget

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

The evolution of the deviations in 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 projected figures is zero.

In Personal Income Tax, income was 1% higher than budgeted (803 million). The deviation is mainly due to the higher withholdings for income, which in turn is explained by an average effective rate increase higher than initially forecast based on the average remuneration forecasts included in the budgetary scenario. In addition, there was also more income in the annual tax return, even though it includes refunds on the tax paid for maternity benefits (94 million) resulting from a judgment subsequent to the preparation of the Budget.

Corporate Tax also showed a positive deviation (580 million). The reason for this deviation is a better than expected split payments, which are estimated at around 1,000 million. These higher incomes were offset by the higher amount, compared to the expected amount, of the refunds made.

In VAT, income was below the budgeted amount of €1,398 million. The deviation was the result of the underestimation of the refunds to be made in 2018.

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

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