Gross tax bases

In 2020, the tax bases of the main taxes decreased by 7.7% compared to 2019. It is the largest drop since 1995, even greater than that recorded in 2008 and later, although in that case the recession lasted for six years (Table 1.3). The fall in the bases was, however, less intense than that shown by the sum of the two reference macroeconomic indicators, internal demand and compensation of employees (Graph 1.9). The main reason for this disparity is found in one of the distinctive features of the year, the compensatory role played by public revenues, in particular transfers derived from ERTE, which are not directly reflected in said indicators.

This element, the role of public income, also explains the difference that occurred between the fall of the bases linked to income and that of those related to spending : the former decreased by 3.3%, while the latter decreased by 13.9% (Graph 1.10). However, when income from the public sector (public salaries, pensions and unemployment benefits, which include ERTE transfers) are subtracted from income, the distance between income and spending is shortened (Graph 1.11). It should be noted that public income already had a very relevant weight in the bases as a whole: In 2019 they represented almost 19% of the bases (double in household income), and in 2020 that position was reinforced to represent more than 22% (close to 42% in households).

The evolution of the bases within the year was determined, logically, first by the extraordinary impact of the confinement starting in the second half of March and, then, by the progressive recovery. Thus, the fall began to be noticed already in the first quarter, it was accentuated in the months of the strictest confinement and it began to recover in the third and fourth quarters, at first recovering with intensity and in the final stretch of the year, coinciding with the worsening of the situation and limitations on mobility, in a more moderate way.

The bases related to spending were the ones that best reflected the consequences of the first confinement and the restrictions of the final part of the year, with an exceptional decline in the second quarter, the intense recovery in the third and the stoppage in the fourth. In income, this profile is only seen in the bases once the income of public origin has been eliminated and somewhat blurred by the accumulation in the third quarter of the Corporate Tax bases corresponding to the central semester of the year. If this is taken into account, the pattern would be more similar to that of spending, with more intense falls in the second quarter and less in the third.

The gross income of households decreased by 0.9%. Income from work increased thanks to the boost from public salaries, pensions and unemployment benefits (including here payments linked to ERTE). On the other hand, other incomes (private salaries, capital and business activities) fell sharply, showing the impact of the drop in activity.

Labor income grew by 1.3%, with very different behavior depending on whether it came from private salaries, public salaries, pensions or benefits. Private sector salaries suffered all the problems derived from confinement and the decline in activity. The drop was 5.8%, more pronounced in SMEs, with greater representation in activities most affected by restrictions, than in Large Companies. Part of this reduction in the wage bill was covered by the Public Employment Service (SEPE) through the ERTE; If these aids are added, the decrease would be approximately 2%. In the public sector, the salary mass grew by 5.9% in the year, slightly more than in 2019. The greatest growth occurred in the Autonomous Communities, especially in the second part of the year due to the increase in the wage bill in health and education. For its part, the pension mass grew by 2.9%, less than in 2018 and 2019, years in which there was a higher pension update than usual.

Household capital income (furniture, rentals and capital gains) decreased by 15.5%, also with uneven behavior in each of the sources. In movable capital (-23.9% in the year) the impact was great as a consequence of the fall in dividends. Rental income lost 9.6% compared to 2019, a direct effect of the problems that productive activity went through all year. Capital gains fell 15% in the year. These incomes largely come from the sale of properties, an activity that was greatly affected throughout the year by the health and economic situation. The gains that have to do with investment funds had, on the other hand, very favorable results that translated into a growth of 14.3% during the year.

Finally, income linked to the profits of personal companies fell by 10.7%. It must be taken into account that activities such as commerce, hospitality, and personal and leisure services are very important in these companies, which were among the most affected by the restrictions caused by the pandemic.

The consolidated corporate tax base decreased by 17.9%, less than profits, whose decrease is estimated at 25.9%. The information declared by Large Companies and consolidated groups in their installment payments indicates that the reduction in the tax base in these companies was greater than the fall for all companies (-22.5%) and the same thing happened in profits. (-34.5%). The decline was especially pronounced in the groups, with a 44% contraction in profits and a 31.5% contraction in the tax base.

The final expenditure subject to VAT fell by 13.3% in 2020, in a context of practical price stability, as a consequence of the confinement measures and subsequent mobility restrictions. The decline was especially intense in household spending on goods and services (-16.3%), while spending on new housing fell by almost 6%. The decrease in spending was not more intense thanks to the brake provided by the higher spending of the Public Administrations, linked to covering the needs derived from the pandemic.

In the part related to Special Taxes, the value of consumption subject to Special Taxes decreased by 17.4% (Tables 1.3 and 5.1). The decrease was observed in both consumption and prices. The drop in consumption was general, in some cases very intense, such as gasoline and diesel (-14.9%) or alcohol (-30.6% for the highest alcohol content, -12.1% for alcohol). beer), logical consequence of the reduction in internal and external mobility and the closure, to a greater or lesser extent, of the hotel and restaurant industry. Likewise, tobacco consumption (6% in cigarettes, although, as in previous years, the rest of the products increased) and electricity consumption (-5.7%). And the previous causes were also behind the drop in fuel and electricity prices, the most relevant in the evolution of this base. In this sense, the average price of gasoline and diesel oil fell, on average, by 13.7% (21.2% before taxes, Table 9.1) due to weak demand throughout the year. In electricity the decrease was 5.5% (Table 5.7), although in the last days of the year rebounds began to be observed.