Accrued taxes and tax revenues

The taxes accrued in 2019 grew by 4.5%, both in total (Table 1.4) and in the main figures (Table 1.3). This rate represents a slowdown compared to 2018, as a result, as has been analysed, of the slowdown in the growth of the bases. Tax revenues grew by only 2%. The difference, which is reflected in Chart 1.17 accompanying this section in the transition from accrual to cash, is mainly due to the existence of extraordinary returns for an amount greater than 2.3 billion, returns that were made in 2019, but which were unrelated to the evolution of bases and taxes.

The IRPF accrued grew by 6.1% in 2019, one point less (5.1%) without the differential rate or family deductions (Table 2.1). The increase is greater than that of the tax base due to the growth in the rate which, as has been seen, is due to the growth in income not subject to withholding.

Withholdings on earned income, which are the main component of the tax, grew by 5.4%, 1.2 points less than in 2018. Withholdings from wages increased by 5.1%, while those linked to pensions increased by 7% (Table 2.3). The slowdown in the wage sector was more intense than in the whole (in 2018, withholdings grew to 6.6%) due to the evolution in the private sector and, specifically, the slower pace of job creation. In public salaries and pensions, however, growth was greater than in 2018. In the first case, the withholdings benefited from both the salary increases and the increase in average rates that this increase entailed, resulting in an increase in the tax accrued of 7.6% compared to 5% in the previous year. In the second, the situation was very similar to that of 2018 (with similar increases in the average pension and in the effective rate), although the final growth was slightly higher (in 2018, withholdings grew by 6.5%).

In 2019, income from personal income tax amounted to 86,892 million, 4.9% more than the amount collected in 2018. The low growth in income with respect to the accrued personal income tax is due to the realization of the refunds generated by the Supreme Court ruling 1462/2018, of October 3, 2018, declaring the income received in the form of maternity and paternity benefits exempt from tax. The ruling meant the refund of the tax paid on these incomes in the years not prescribed. Refunds for the 2014-2017 financial years began to be paid in December 2018 and continued throughout 2019, even though they had nothing to do with the income generated and the tax accrued in those two years. If we add the amount returned in 2019 (1,046 million; Table 1.5) to income, the growth of these would have been 6.1%, the same increase estimated for the accrued personal income tax.

The Corporate Tax accrued grew by 0.8% in 2019 (Table 3.1). Not taking into account the differential rate planned for 2019 (which will be announced in the second half of this year), the tax decreased by 5.2%. The difference between the two measures is due to the evolution of the fractional payments, the main component of the tax, which fell by 6.7%, a decrease caused by the high amount of these payments in 2018 thanks to the behavior of the five large groups mentioned when talking about the bases.

Corporate tax revenues amounted to 23.733 billion, 4.4% less than in 2018. As with personal income tax, extraordinary refunds were made in 2019, in this case for an amount exceeding 1.2 billion (Table 1.5), derived either from rulings or from different payments for conversion of deferred tax assets (known as DTA), and, therefore, without any link to the tax determinants in 2019. Without them, revenue would have increased by 0.4%, a figure more consistent with accrual.

Apart from these extraordinary returns, cash inflows in 2019 were characterised by the decrease in instalments already mentioned and by two elements that offset this drop: the good results of the positive share of the annual declaration (corresponding to 2018 and which grew by 10%) and the lower amount of refunds made (544 million less, -6%).

In 2019, the VAT accrued grew the same as the subject expense, 3.4% (Table 4.1). As seen, the regulatory changes were minimal and their impact on the average rate was insignificant.

Cash receipts from VAT amounted to 71,538 million, 1.9% more than in 2018 (Table 4.2). Gross VAT grew by 3.6%, but its impact on total net income was limited by the increase in refunds made (8.2%), which is explained by the strong increases in monthly requests in the first months of the year and due to the greater pace of completion compared to last year.

The Excise Taxes accrued grew by 5.5% in 2019 (1.9% in 2018; Table 5.1), but the entire increase was a consequence of the integration of the old regional rate into the special rate of the Hydrocarbon Tax. Without this change in the way this part of the tax is collected and also eliminating the impact of RDL 15/2018 (which declared the consumption of natural gas, diesel and fuel oil used in the production of electrical energy exempt), the taxes accrued by Special Taxes would have decreased by 1%. The Hydrocarbon Tax grew by 12.5% (Table 5.5), but without regulatory or management changes it would have grown by only 0.3%. The meager growth of the main consumptions (petrol and diesel) has already been commented on, but to this we must add the fall in natural gas consumption (apart from the already mentioned impact of RDL 15/2018). The accrued Tobacco Tax fell by 1.4% compared to the increase of 2.4% in 2018 (Table 5.6). Total consumption decreased by 1% (cigarettes, the main consumption, decreased more, but the decrease was partially offset by the increase in other occupations). Revenues from the Electricity Tax remained practically stable compared to 2018 (+0.1%; Table 5.7), thanks to smaller reductions for large consumers that offset the decline in consumption and the moderate increase in prices. In alcohol taxes, accrued taxes increased by 2%, with greater growth in Beer than in Alcohol and derived beverages (Tables 5.2 and 5.3). The most negative note was provided by the Coal Tax, which decreased by 68% in 2019 (Table 5.8). The immediate cause was the application of RDL 15/2018 which, by making the use of natural gas for electricity generation more attractive, had a very negative impact on the consumption of coal for that purpose. In the medium and long term, the decision by large producers to gradually abandon this raw material as a source of energy will result in income from this sector becoming minimal.

Excise tax revenues rose to 21.38 billion, an increase of 4.1% compared to 2018. Without any regulatory changes, revenues would have fallen by 0.8%, a rate similar to that recorded for accrued tax.

Taxes other than the four main tax types analysed contributed 9,265 million to revenues, a figure that was almost 10% less than in 2018 (-1,019 million). The decline is mainly explained by two taxes: the environmental taxes and the Non-Resident Income Tax . In the first case, the majority of the decline (-852 million) is due to the temporary elimination of the Tax on the Value of the Production of Electrical Energy in two quarters (fourth quarter of 2018 and first of 2019), a measure contemplated in RDL 15/2018; In the second case, the drop was due to the high income recorded in 2018 in the annual tax return (Table 6.1). Losses were also recorded in Other income of Chapter I of direct taxes (-161 million, mostly due to the existence of extraordinary refunds in the Tax on Inheritances and Donations derived from court rulings), in Other income of Chapter III (-149 million) and in Tax on Fluorinated Greenhouse Gases (-29 million, almost all due to the rate cut that began in September 2018). On the contrary, revenues increased significantly (50.1%, 341 million) in the Rates (Table 6.6), thanks to the Fee for the use of continental waters for the production of electric energy (which had had a low performance in 2018 due to the drought of 2017; the fee is settled the following year) and the Radioelectric and Telecommunications Fees (the first for an extraordinary income and the second for the delay in making the refunds).