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Fiscal Year 2020

5. Special Taxes

The income from Special Taxes (II.EE.) was 12.1% lower than those registered in 2019, reducing collection to 18,790 million, a level equivalent to that in the years 2011-2012. Income decreased in all figures, but, with regard to the three most important, the most intense fall was located in the Hydrocarbon Tax (-15.8%). Its trajectory was parallel to that of activity and consumption, accentuated in the last part of the year by limitations on mobility. In the Electricity Tax, which is linked to the same variables, income decreased, but in a somewhat more moderate way (-10.1%) as it was less affected by some of the restrictive measures. In the Tax on Tobacco Products, the decrease in income was not new (it is the fourth year in which it has occurred), although it did so at a greater rate (-3.1%) than in previous years. Regulatory changes contributed a marginal figure to revenue.

The fall in consumption of products subject to II.EE. was general (Table 5.1), 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. Tobacco consumption (6% in cigarettes, although, as in previous years, the rest of the products increased) and electricity consumption (-5.7%) also experienced losses.

The same reasons that explain the behavior of consumption were those behind the downward evolution of fuel and electricity prices. Thus, the average price of gasoline and diesel fuel fell, on average for the year, by 13.7% (21.2% before taxes; Table 9.1) due to weak demand throughout the year, also in the global context (the price of a barrel in euros fell by more than 37%). In electricity, the decrease was 5.5% for the year as a whole (Table 5.7), although in the last days of the year rebounds began to be observed. On the other hand, in other taxes the poor consumption situation did not, in general, translate into a decrease in prices. The average retail price of a pack of cigarettes rose 0.9%, compared to the slight drop in 2019. The increase occurred in the most expensive varieties, while in the cheapest ones and in the rest of the products the price did go down (Table 9.2). In alcoholic beverages, the price increased by 1.2% for those with higher alcohol content (Table 5.2) and by 2.9%, a rate similar to that of 2019, for beer (Table 5.3). The fall in consumption and the significant reduction in the prices of energy products led to a decrease in the value of products subject to II.EE. (before VAT) of 17.4% (Tables 1.3 and 5.1).

There were no regulatory changes in 2020, so the variations in the effective types (Table 5.1) are due exclusively to the different intensity in the fall in consumption of the different products and, in In the case of taxes that revolve around value, to the evolution of prices. The first of these elements is clearly seen in the Tax on Hydrocarbons in which the effective rate of gasoline and diesel oil fell by 2.8% due to the largest drop recorded in the consumption of products with a higher rate (gasoline).

The Special Taxes accrued lost 13.3% compared to the level reached in 2019 (Table 5.1). All figures decreased, both due to consumption and, in some cases where the basis is value, due to prices. Almost three quarters of the fall is explained by the Tax on Hydrocarbons (-17%), the most important of all of them, although the most striking decreases were those registered in the Tax on Alcohol and Derived Beverages (-30.4% ) and in the Tax on Coal (-57.5%), in the process of virtual disappearance since the large producers announced the abandonment of this product as a raw material for the generation of electricity.

The Hydrocarbon Tax registered a decrease of 17% (Table 5.5), which contrasts sharply with the increase in 2019 (12.4%), although it must be remembered that this was only due to regulatory changes (autonomous tariff and RDL 15/ 2018) and that, without them, the increase was reduced to practically zero. The profile of this income throughout the year was a good example of the impact of the restrictions derived from the fight against the pandemic. From the first moment, the drop in activity was noticed with all its intensity, with minimums that reached close to 80% in some products in the months of strict confinement. Subsequently, in the third quarter, the negative rates moderated substantially, but mobility limitations in the final months of the year caused a relapse. The evolution of each of the main products reveals the different degree to which different uses were affected: -20.9% in gasoline (linked to consumption), -17.2% in automotive diesel (more related to transportation) and +0.8% in subsidized diesel (agricultural and fishing tasks, and heating). This environment caused the trend toward a greater role in gasoline consumption to be broken, a fact that was analyzed in detail in last year's report. At the same time, as seen in a previous paragraph, the greater drop in gasoline and the small increase observed in the consumption of subsidized diesel meant a drop in the average effective rate of the tax. As can be seen in Chart 5.1, rate reductions of this magnitude have only been observed in other moments of crisis such as 2008 or 2012.

The Tax on Tobacco Products accrued fell by 4.2% in 2020 (Table 5.6). The decrease was concentrated in cigarettes (-5.4%), while the tax on other products grew by 5.5%. The income generated by these other tasks has doubled in the last decade, but they still play a somewhat marginal role in the overall tax, dominated by cigarettes. During the year, the behavior of the tax maintained the pattern of irregularity that characterizes it, exacerbated by hoarding in anticipation of shortages at certain times of the year (especially at the beginning of confinement) and the uncertainty associated with tourist movements on the eve of summer. All of this caused a large increase in collection in the first quarter and significant losses in the rest of the year. As has been mentioned in hydrocarbons, the exceptional situation also broke the trend of previous years, in this case of stability, with a tax accrued somewhat below 6.6 billion euros (average from 2013 to 2019), based on the cigarettes, with falling consumption offset by a slight increase in rates linked to prices.

In 2020, the Electricity Tax accrued decreased by 9.7% (Table 5.7). Its evolution was similar to that of hydrocarbons, following the rhythm of the restrictions, but always with more moderate falls, even despite the decrease in prices (which in this tax form part of the tax base), due to its greater link with household consumption. The consequence was a contraction of the tax base of 10.9%, 5.7 points coming from consumption and 5.5 from prices. As a counterweight to these falls. The tax benefited from the smaller reductions to which large consumers and certain sectors are entitled, hence the loss in the tax accrued was somewhat less than that of the tax base.

In taxes on alcohol the drop was very pronounced, especially in the Tax on Alcohol and Derived Beverages (-30.4%; Table 5.2), although in the Beer Tax (-12%; Table 5.3) there had never been such a setback either. Logically, the reasons for these decreases are found in the capacity limitations in hotels and restaurants and in the restrictions on mobility that were established, to varying degrees, since the first state of alarm began. In both figures, the decrease in the second quarter was very intense (-53.5 and -23.7%, respectively) and then there was a recovery that was frustrated at the end of the year.

The Coal Tax evolved regardless of the situation experienced in 2020. It was reduced again, this time by 57.5%, so that at the end of 2020 the tax accrued was just over 12.5% of what it was in the years of maximum performance between 2014 and 2018 (35 million in 2020 , 271 on average in those years). As already noted in last year's report and in successive monthly reports, this figure is destined to play a residual role within the system once the use of coal in electricity generation by the largest producers was abandoned. .

The cash income from Excise Taxes decreased less than the tax accrued (-12.1 compared to -13.3%) thanks to the positive effect that occurs in times of decline in the collection (the cash data includes a data without decrease, which is carried over from the previous year, and the last periods of 2020 are not counted, with negative rates, which are carried over to the following year's cash). Regulatory and management measures bring in a few million (24; Table 1.5) that hardly alter the result. These measures are related to the fringes of changes produced in 2019 (regional rate in the Hydrocarbon Tax) and to those approved to facilitate the deferred payment of tax debts.