5. Special Taxes

The revenues from Special Taxes (II.EE.) totaled 21,380 million, which represented an increase of 4.1% compared to the revenues of 2018. However, the entire increase was the result of the integration of the old regional rate into the special rate of the Hydrocarbon Tax. Without any regulatory changes (regional tariff and exemption of natural gas, diesel and fuel oil used in the production of electricity) revenues would have decreased by 0.8%. The three main features of the year were the slight increase in Hydrocarbons (0.3% without regulatory changes), the new decrease in Tobacco Products (-1.3%) and the reduction by almost half (-48.7%) of the revenue from the Coal Tax.

Except for beverages included in alcohol taxes, the consumption of products subject to II.EE. was worse in 2019 than in 2018 (Table 5.1). In the Hydrocarbon Tax, the set of gasolines and diesel fuels, the main products of the tax, grew by only 0.5% (2.4% in 2018). Part of the moderation comes from subsidized diesel, which in 2018 had grown above normal and in 2019 fell, but the key explanatory factor is the fall in automotive diesel. There was also a decrease in the consumption of cigarette packs (-1.9%, +1.6% in 2018), although this was partially offset by the increase in other tobacco products and electricity consumption (-1.8%, compared to 2% in the previous year). As mentioned, only alcohols saw growth, and more intensely than in 2018: 1.7% in the Tax on Alcohol and Derived Beverages and 2.3% in the Tax on Beer (1% and 0.9%, each of them in 2018).

Prices in 2019 behaved much more moderately than in 2018. In energy products the increases were much smaller: In hydrocarbons, the average price of gasoline and diesel only increased by 1.2% (compared to the average of 9% in the previous two years; Table 9.1), and in electricity the increase was 0.9% (3% on average in 2017 and 2018; Table 5.7). In tobacco, the average price per pack remained practically stable (-0.2%, although the greater growth of the cheapest products led to a greater drop in the average price of all tax products, -0.4%, Table 9.2). The average prices of alcoholic beverages also fell (-0.4%; Table 5.2) and only in beer was an upturn observed (2.9% in 2019 and 0.2% in 2018; Table 5.3). The moderation of consumption and prices resulted in an increase in the value of consumption taxed with II.EE. 0.6% compared to 7.2% in 2018 (Tables 1.3 and 5.1).

In 2019, the effective rates (Table 5.1) only responded to changes in the composition of the basket of products and to price variations in those taxes whose base is value. It should be noted that, in the case of hydrocarbons, which was the only figure in which regulatory changes occurred, the effective rate is calculated for the general rate and for the main products (gasoline and diesel). Looking more broadly, the effective rate on that tax would have changed for two reasons: the exemption introduced by Royal Decree-Law 15/2018, of October of that year, for natural gas, diesel and fuel oil used in the generation of electrical energy, and the integration of the regional rate into the special rate of the tax. Regarding the latter, the measure not only meant a redistribution in the way that part of the tax was collected, but also an increase in the rate by equalizing the rate in all the autonomous communities. without any of them losing revenue.

The II.EE. accrued grew by 5.5% (Table 5.1), but the entire increase came from the integration of the regional rate, which led to an additional increase in the accrued tax of 1,466 million. Without this income, the II.EE. accrued would have decreased by 1.7% compared to 2018. The main reason for the decline is, as analysed, the poor performance of consumption, to which was added the negative impact of RDL 15/2018, the low increase in prices and the progressive disappearance of coal as a raw material in the production of electrical energy.

The accrued Hydrocarbon Tax grew by 12.5% thanks, mainly, to the inclusion of the regional rate. Without it or the loss of income caused by RDL 15/2018, the increase would be only 0.3%, consistent with the evolution of consumption of the main products, gasoline and diesel (0.5%). The increase in consumption in 2019 was significantly lower than in 2018 (2.4%), for two reasons: In 2018, there was a spike in the consumption of subsidized diesel fuels, which was corrected in 2019 (in 2018, consumption reached almost 5.8 billion liters, when the normal rate in previous years was not to exceed 5.55 billion liters; in 2019 there were more than 5,600) and the slight drop in automotive diesel (-0.2%). This drop is significant for several reasons. Firstly, because it is the most consumed product and the one that generates the most revenue. Second, because it is closely linked to the activity; In fact, there had only been declines in the crisis years (2008 to 2013). And thirdly, because it accentuates the trend, which was already mentioned in last year's report as a novelty, of replacing diesel with gasoline, a product that grew by 6.7% in 2019 after 4.5% in 2018. As noted then, the share of automotive diesel within the total of gasoline and automotive diesel fuels grew from just over 50% in 1995 to a peak of 81.3% in 2016-2017. In 2019, that percentage was already less than 80%. This transformation also entails a slight increase in the average effective rates of these two products, excluding the subsidised diesel (one tenth in 2018 and three in 2019).

The Tobacco Tax decreased by 1.4% in 2019, with a 2% decrease in cigarettes and a 3.7% increase in other products. Chart 5.2 clearly illustrates the zigzag evolution of the tax, although since 2013, as already mentioned in last year's report, it has stabilised at just below 6.6 billion euros. The same is true for consumption, although this trend is slightly downward, offsetting the small price variations. However, this was not the case in 2019, when consumption and prices fell simultaneously, although with very different behaviour in cigarettes (with losses in both) and in the rest of the products (with growth).

The Electricity Tax accrued was practically the same as in 2018 (+0.1%). The year was negative in consumption (-1.8%) and with moderate increases in prices (0.9%), especially compared to the previous year when growth of 2% and 3.4% was recorded, respectively. The reduction in the value, which is the basis of the tax, by 1% was not observed in the tax because at the same time the amount of the reductions applied by some taxpayers (large consumers, specific sectors) decreased, returning these to the level they had in 2017.

The situation was more positive in terms of alcohol taxes than in other areas. The accrued Tax on Alcohol and Derived Beverages grew by 1.8% compared to 1% in the previous year. With hardly any change in the effective rate, the entire increase was due to improved consumption. The same occurred with the Beer Tax, with an increase of 2.3%, which exceeds the 1.7% of 2018.

The Coal Tax was the one that varied the most in 2019. The tax accrued decreased by 68% as a result, on the one hand, of the reduced attractiveness of coal as a raw material in the generation of electric energy after natural gas was declared exempt from the Hydrocarbon Tax for the same purpose, and, on the other, due to the decision of the large electricity producers to gradually abandon this form of production.

In 2019, revenue from excise taxes grew by 4.1%, although if the effect of the integration of the regional tariff and the negative impact of the natural gas exemption are eliminated, revenue would decrease by 0.8%. The cash impact of the set of the two measures (Table 1.5) is lower than that reflected in accrual because the positive effect of the integration is lower (only the one corresponding to 11 months and also includes the refunds to transport professionals linked to that part of the rate) and the negative one is greater (one more month than in accrual).