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Gross tax bases

In 2021, the tax bases of the main taxes grew by 12.7%. This growth is higher than the drop in 2020 (- 7.5%), so at the end of the financial year the taxable bases were higher at 4.2% than those recorded in 2019 (Table 1,3). As in 2020, when the fall in the bases was lower than that of the macroeconomic indicator that was usually used as a benchmark (the sum of domestic demand and wage earners), in 2021 the bases also showed a better performance. Chart 1,12 shows that while the bases increased compared to 2019, as mentioned above, 4.2%, the sum of both accounting aggregates decreased (2.5%). Just like then, there are reasons that explain the disparity. In 2020, public income was some of which (such as transfers linked to ERTE and to aid to self-employed workers) are not reflected directly in the indicator. These incomes in 2021 played the opposite role, but on the other hand, other bases (such as business profits or the value of energy consumption), also without immediate translation into the indicator or with less weight in it, acted in favour of the taxable bases. However, even on the bases closest to the indicators (the expenditure subject to VAT in the case of domestic demand or wages in the case of wage earners) the differences were accentuated in 2021. As an example, the wage base from tax returns is the equivalent conceptually to the wages and salaries included in the remuneration of employees, which in 2021 was 3.1% higher than in 2019, while the salaries and salaries estimated by the National Accounting were 2021% lower than those of that year in 0.8.

Chart 1,12. Amounts and rates of variation in% of the taxable bases of the main taxes and internal demand plus employee remuneration.

Logically, the evolution of the bases throughout the year was determined by the comparison with what happened in 2020, a year marked by the lockdown and the different degrees of restrictions on activity and mobility (Chart 1,13). Thus, the year began with moderate growth, conditioned by the effect of the wave of infections at the end of 2020 and the beginning of 2021 and due to the effect of the Filomena storm, to recover intensely in the second quarter in response to the intense fall of the activity in the strictest months of confinement in 2020 and, subsequently, to remain in the second half of the year at rates slightly above 13%.

Chart 1,13. Variation rates in% of the quarterly aggregate tax base.

In 2021, the growth of the bases linked to the income was less intense than that of those associated with the expense (8.4% and 19.4%, respectively; Chart 1,14), which again reflects what happened in 2020, when the effects of the pandemic have affected more strength in spending impairment, while the drop in income was limited by the buffer that led to public income, both salaries and pensions and other benefits, especially those derived from ERTE and aid to self-employed workers. Compared to 2019, the incomes exceeded those at that time by 5.4%, while the expenditure was 2.4 % higher than the figure reached two years ago, thanks above all to the intense progress made in the second half (in the first half still expenditure levels remained below the 2019 records), favoured by price increases observed in the final stretch of the year.

Chart 1,14. Amounts and rates of variation in% of the income tax bases and the bases on the expenditure.

Gross household income grew by 2021% in 5.9 (Table 2,1), with an improvement in all its components, which, logically, was more intense in incomes from the private sector (wages, capital income and income from the company) that last year had a worse performance (Chart 1,15). Public income, on the other hand, in 2020 allowed the fall in household incomes to be halted and in 2021 they maintained practically the level of one year earlier. Overall, compared to 2019, the incomes were 5.5% higher than those at that time. Except for movable capital income and income from leases of premises, the rest of the returns were above the level of 2019.

Chart 1,15. Variation rates in%. Household, public and private income.

Income from work, the main component of household income, grew by 4.3% (Table 2,1). The divergence between the private and public sector developments remained throughout the year, reflecting what happened the previous year. Private sector wages grew by 8.2%, thanks in particular to the good results of SMEs (15.1%,-12.4% in 2020), which are more evident in the second half of the year. In Large Companies, growth was 3.4%, compared to the drop of 2.7% in 2020. Compared to 2019, the private sector's wage base was 2021% higher than that seen in 0.7 (0.6% in Large Companies and 0.8% in SMEs). Meanwhile, public income (wages, pensions and benefits) grew by 0.4%, a relatively low rate that is justified by the comparison with 2020 with very high levels of unemployment benefits (which include transfers linked to ERTE). As for public wages, growth in the year was 5.1% (5.2% a year earlier), the trend of moderation was confirmed in the fourth quarter once the impact of the second half of 2020 was absorbed. higher contracts in health and education and increases resulting from the process of equal pay in the security bodies. Finally, public pensions continued to grow by around 3.5% throughout the year. Around two and a half points of the improvement compared to 2020 was due to the rise in the average pension, which was caused by the revaluation at the start of the year and, as is customary, due to the incorporation of pensioners with average pensions higher than those already in the system. The increase in the number of pensioners explains the remaining increase.

Chart 1,16. Variation rates in%. Private, public and pension salaries.

Chart 1,17. Disaggregation of the private wage base between large companies and SMEs. Amounts and variation rates in%.

For all household capital income, growth is estimated at 2021% in 12.6, following the drop of 12% in 2020. This advance was not enough to recover the levels of 2019 (1% below). The evolution was very uneven in the different assets. The return on movable capital closed the year with a decrease of 2.2%, which accumulated to a decrease of 19.7% in 2020, which means a drop of 2019% compared to 21.5. Income from real estate capital, on the other hand, increased its dynamism throughout the year, so that by 2021 growth was 7.5% compared to 2020 and 1% compared to 2019. Within these incomes, the performance of those from the lease of premises was worse than that of the whole: They grew 5% in the year, but still below (10.1%) than in 2019. In capital gains, income with the best results in 2021 was 31%, highlighting the exceptional increase in gains linked to investment funds (80% that are combined with growth of 12.3% in 2020).

Finally, with regard to the profits of personal companies, they grew 20.6% in 2021, after the drop of 14.6% in 2020. It should be recalled that these companies are highly concentrated in activities that were particularly affected by mobility limitations (transport, hospitality, personal and leisure services) and, therefore, a marked recovery in 2021 should be expected to the extent that these limitations were being relaxed. However, the recovery was better than expected and even though the restrictions did not disappear completely, the result in 2021 exceeded the levels reached in 3 by 2019%.

The consolidated tax base for Corporation Tax grew by 26.7% in 2021 (Table 3,1). The rate is calculated against very affected amounts due to the impact of the pandemic, which is why the comparison with 2019 is more informative. In this case, the increase is estimated at 4.7%. Profits grew by 32%, largely in response to the sharp decline in 2020, but also due to the contribution of some extraordinary operations (a banking merger and the sale of assets from a large company). Compared to 2019, profits in 2021 still remained 6.8% below those of that year. The information declared in the instalment payments (Table 3,2) indicates that the increase in profits and the gross tax base was greater in groups (even if the impact of the merger and sale of assets is eliminated) than in Large Companies and SMEs that they declare according to the profit of the period.

Chart 1,18. Accounting profit of companies and taxable income of Corporation Tax. Amounts and variation rates in%.

The final expenditure subject to VAT showed an intense growth in 2021, closing the year at 19.3% above the level reached in 2020 (Tables 1,3 and 4,1). The expense was also higher, by 3%, than in 2019. In the last part of 2021, a significant rise in prices was observed that favored the increase in nominal expenditure, although, as can be seen in Chart 1,19, most of the increase was due to the increase in actual expenditure. From the point of view of the components, the greater growth occurred in the expenditure of families (which is the largest group weight in the total and the one most affected by the restrictions in 2020) for which an annual growth of 21.8% is estimated, standing above the 2019 figure (+ 1.2%). Housing expenditure rose by 2021% in 16.4, while government current and capital expenses grew by 7.1% (both cases the fees compared to 2019 exceeded 11%).

Chart 1,19. Variation rates in%. Final expenditure subject and deflator of expenditure.

With regard to Special Taxes, the value of consumption subject to Special Taxes increased by 19.9% in 2021 (Tables 1,3 and 5,1). This increase was not enough (except for electricity) to recover levels of 2019 following the sharp contraction in 2020, due both to the negative evolution of consumption and the drop in prices, the latter especially intense in fuels and electricity. The recovery of consumption in 2021 is precisely understood by the upward trend of both components. Less in tobacco, both consumption and prices increased in 2021, highlighting the strong increase that since mid-year , they experienced the prices of petrol and gas oils (Table 9,1) and electricity (Table 5,7), not only compensating for the previous fall, but growing to reach highs (since 2014 in the case of petrol and gas oils, the largest in the series in the case of electricity). However, it should be recalled that, as will be seen later, despite the price increase, this did not translate into higher income, either because, as in gasoline and gas oils, the tax is based on physical consumption (therefore, the price increases are not increasing, but rather reduce it), either because, as in electricity, the rate fell within the set of measures aimed at mitigating the effect of these price increases.

Chart 1,20. Variation rates in%. Value of consumption subject to excise duty, electricity prices and prices of petrol and gas oils.