Gross tax bases

The tax bases of the main taxes grew by 4% in 2019 as a whole, almost two points less than in 2018 (5.8%). It is the first year since 2014 in which annual growth is lower than the previous year. The increase is similar to that recorded by the sum of internal demand and compensation of employees, which are the two reference macroeconomic indicators.

The slowdown in growth was observed both in the bases linked to income and in those linked to spending , although with more intensity in the latter. In the first case, growth in 2019 was 4.6%, one and a half points below the estimated rate for 2018; In the bases related to spending, the increase is estimated at 3%, below the previous 5.3%.

Both the slowdown in growth and the evolution within the year were mainly marked by four facts: the different behavior of household incomes in the first and second half of the year due to the step in growth that occurred in the second half of 2018 after the increases in public salaries and pensions caused by the approval of the Budgets in July; the drop in the corporate tax base in the third quarter when compared to an exceptionally high figure from the previous year; the progressive moderation of domestic demand that affected spending subject to VAT; and the decrease in the prices of energy products in the second half of the year with its consequent effect on the value of Special Tax consumption. These four elements caused growth in the first half of the year to be higher than in the second, although the differences were really concentrated in the third quarter.

The gross income of households grew by 5.3% in 2019 (6% in 2018). The behavior was very different in the first and second part of the year due, as indicated, to the impact of the increases in public salaries and pensions included in the 2018 Budget since July of that year, which is They added new increases in 2019. Graph 1.11 shows this effect on salaries and pensions, which are the main component of household income. The graph clearly shows the upward trend in the third quarter of 2018, its continuation for four quarters and its moderation in the second part of 2019. The growth that was recorded in that last section did not reach that observed before the step because it hid the slowdown that was occurring in the private sector as a consequence of the lower rate of job creation. The final result was a growth in salaries and pensions as a whole during 2019 that was slightly lower than in 2018 (5.1% compared to 5.3%).

For its part, capital income (furniture, leases and capital gains) increased by 7.1% in 2019 (Table 2.1). The growth was half of that experienced in 2018 (14.5%), but the latter had a peculiar behavior due to the advance of rents to avoid the rate increase that was announced for 2019 and which manifested itself in strong increases in the rents of movable capital and capital gains. The same thing also occurred in 2019, but not with enough intensity to modify the results for the year as a whole. In any case, the 2019 rate adds to the high growth recorded in the last three years.

Regarding companies, it is estimated that the consolidated corporate tax base grew by 0.5% in 2019. Profits would have grown by 2.3% in the same period. In both cases the results were lower than those of 2018 (6.1% and 9%, respectively). In the same sense, the information on the evolution of profits that can be deduced from the statements presented in 2019 by Large Companies and groups represented a drop in profits, concentrated in the groups (five of them that had an exceptionally good performance in 2018 explain the entire decline), while in Large Companies the growth would have been around 1%.

In the part referring to spending, final spending subject to VAT grew by 3.4% in 2019, more than a point and a half below the increase recorded in 2018. The downward trend was a consequence above all of the general slowdown of the economy, but also of the moderate increase in prices. All expenditure components (households, AA.PP., housing) showed the same trend, although it was more pronounced, in terms of rates, in the sale of new housing.

Finally, the value of consumption subject to Special Taxes grew by only 0.6% in 2019 (7.2% in 2018). The drastic changes observed in this series are usually due to the evolution of energy prices and, in particular, those related to gasoline and diesel. In 2019 these prices grew by 1.2%, with all the growth accumulated in the first semester (in the second they decreased by 1%); In 2018, however, they rose more than 9%. However, if we look at physical consumption, the results are not much better. In the main figures, consumption grew very little or decreased: Gasoline and diesel consumption increased by 0.5% (almost two points less than in 2018), electricity consumption decreased by 1.8% and shipments of packs of tobacco from tax warehouses decreased by 1.9%. Only alcohol consumption subject to Excise Taxes increased compared to 2018 (1.7% in alcohol and derived beverages and 2.3% in beer), also at a greater rate than then.