Summary

In 2019, tax revenues rose to 212,808 million euros, 2% more than in 2018.

During the year, among other factors, the impact of regulatory and management measures stood out, which led to a reduction in income of nearly 3,800 million (almost 70% due to extraordinary returns regardless of the evolution of bases and taxes). Without this impact, revenues would have increased by 3.8% .

The economic situation in 2019 was characterized by the progressive slowdown in activity. Real indicators (GDP, employment) moderated their year-on-year growth as the year progressed, as did the indicators obtained from fiscal information (deflated total sales and number of salary recipients in Large Companies and corporate SMEs); In this case, it was also observed that the deceleration slowed down in the central months of the year and was accentuated in the final part. In nominal terms, although GDP maintained stable growth throughout the year, domestic demand, which is the macroeconomic aggregate most closely related to income, also showed a downward profile, similar to the trajectory of sales, with high growth in the first parts of the year, more moderate in the central semester and with a new slowdown in the final quarter. The remuneration of employees was the only variable with a more expansive behavior than in previous years thanks to salary increases.

The tax bases of the main taxes reflected in 2019 the slowdown in spending and the dynamism of income from salaries and pensions. Growth for the year as a whole was 4%, almost two points less than in 2018. In spending, the slowdown was more intense than that experienced by domestic demand due to the greater influence that variations in energy prices have on the bases, with growth much lower in 2019 than that recorded in 2018. In income, the dynamism of those linked to households was partially offset by the small growth in the corporate tax base.

To the evolution of economic activity and the bases, we must add, as has been said, the significant impact that the regulatory and management measures in force in 2019 had. Three of them are worth highlighting: the consideration of maternity benefits as exempt income, which meant more than 1,600 million lower income both due to the returns for the 2014-2017 period and due to the adjustments to withholdings in 2019 and in the 2018 annual declaration; the measures that came into force after the approval of the 2018 Budgets that involved the reduction of withholdings for the lowest incomes (pensioners and SME workers, mainly) and the expansion of family deductions (together more than 1,100 million ); and the existence of extraordinary refunds in Corporate Tax (derived from court rulings and DTA payments) for an amount of more than 1,200 million.

Given the evolution of economic activity and the bases, together with the negative impacts of regulatory and management changes, tax revenues grew by 2%. Collection from Personal Income Tax increased by 4.9%. This figure is the most affected by the regulatory and management changes in 2019. If this loss of income is corrected, the growth would have been 8.2%. Practically all the growth is explained by the increase in withholdings and the results of the annual declaration. In Corporate Tax income decreased by 4.4% (+0.4% if extraordinary refunds are eliminated). Along with these returns, the most notable fact was the decrease in installment payments, a consequence, in part, of the high increase that occurred in 2018 and which was concentrated in a small group of large companies. The fall was cushioned by the growth in income from the annual declaration and by the lower amount of refunds made. Income from VAT grew by 1.9%, growth that moderated throughout the year, in line with the evolution of sales and inflation. Income from Special Taxes grew by 4.1%, but only due to the inclusion of the old regional rate in the special Hydrocarbon Tax rate. Without this contribution, income would have decreased.