Effective rates

The average effective rate on income and expenditure estimated for 2020 stood at 14.9%, 1% below that recorded in 2019. Although provisional until the personal income tax and corporate tax rates for the 2020 financial year are known, the rate is the lowest since direct taxes were reformed in 2015 and 2016 and there was a downward step after which a very smooth increasing trend (Graph 1.16). This upward trend had its origin in the continuous increase in the effective rate on household income. This growth continued in 2020, but was offset by the drop in the effective rate of Corporate Tax. In any case, the decrease that occurred in the rate was due more to the composition effects of the tax basket (especially in a year with strong variations in the bases) than to the fact that there were regulatory changes that significantly altered the level. of taxation; The numerous regulatory measures that were in force in 2020 mainly affected the form of income and only marginally affected the tax burden.

In personal income tax, the effective rate increased to 12.9%, 1.1% more than in 2019 (Graph 1.16). As has been noted for the set of bases, the increase was, fundamentally, a consequence of the strong changes in the internal composition of the tax. Withholdings for income from work and economic activities are a good example. The effective rate grew by 0.4%, but when the parts that make it up are analyzed, it is found that there were considerable changes in the rates. Thus, the average wage rate grew by 4% and that of pensions by 2.2%. In the first case the reasons were two: the increase in the rate in the salaries of the AA.PP. and the greater impact that the fall in activity had in sectors with lower salary levels and average rates. This last element partially compensated for the lower withholdings that occurred due to the fall in the wage bill and the lower withholdings derived from the ERTE. In the case of pensions, the increase in the rate was similar to the increases that were observed before the increases in the lowest pensions that occurred in 2018 and 2019.

In the Corporate Tax in 2020, an effective rate on the consolidated tax base of 19.4% is estimated, below the 20.4% in 2019. In relation to the positive accounting result, the rate would be 8.3% (7.8% in 2019). The regulatory changes did not affect the tax accrued and, therefore, the decrease is due only to the different pace at which the benefits and bases of the different groups of taxpayers decreased.

In VAT, RDL 15/2020 introduced the zero rate for essential medical supplies to combat COVID, as well as the super-reduced rate on books, newspapers and digital magazines. Both measures had little estimated impact on the effective rate, which stood at 15.2% (compared to the 15.3% average observed in the last four years).

The average effective rate on Special Taxes increased by 5%, more than in 2019 when it increased by 4.5%. The main cause of the increase was the notable drop in energy prices and, in particular, those of gasoline and diesel. As in other years, it must be clarified that the effective rate discussed in this section is calculated on the value of consumption and is done only for the purpose of completing the aggregate analysis of bases, rates and income, but it is not always the rate that is applied. to the products since in several figures the basis is physical consumption and not value. By figures, in 2020 the most notable thing was the decrease in the effective rate of gasoline and diesel by 2.8% due to the intense drop in gasoline consumption, the product with the highest rate.