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Tax revenues and their comparison with the Budget

In 2021, 1,277 million more were raised than expected in the 2021 Budget (Table 1,7). This positive deviation was the result of a better performance in all major figures, with the exception of Special Taxes. The largest collection is more noteworthy as it occurred in an adverse context for three reasons: The forecast was made under a cost assumption that was higher than the last (the forecast for the national final consumption expenditure in the PGE-2021 was higher than the figure currently estimated); There was lower income due to regulatory changes (some measures did not come into force); And measures were taken to reduce the cost of electricity (the reduction of the rate in VAT and the Special Tax on electricity and the elimination of a quarter of the Electricity Production Value Tax) that were not considered when the PGE-2021 were made.

Infographic on the budget deviation for Personal Income Tax 2021

In Personal Income Tax, the deviation was positive for the amount of 350 million, 0.4% of the budgeted collection. The improvement was mainly concentrated on income from withholdings on work and economic activities and capital gains on investment funds. Part of these positive deviations were offset by the lower income in the annual tax return, and in the withholdings on capital and on leases.

In Corporation Tax, income was much higher than those provided for in the Budgets. The deviation was 4,907 million (22.6% of the planned collection). The good progress of the instalment payments, in addition to a couple of extraordinary transactions, and the surprise in the withholdings on investment fund gains justified the higher income.

In VAT, the positive deviation is 279 million, which means a 0.4% offset compared to the expected income in PGE-21. The deviation is positive despite the unexpected reduction in electricity VAT, which negatively affected the collection of recent months.

The Special Taxes collection was below the budgeted figure of 2,080 million, 9.5% less than expected. A weaker consumption of the forecast in the macroeconomic scenario at the time of drawing up budgets is the main reason for the error, to which the reduction of the rate must be added in the Electricity Tax approved in September 2021.

The largest negative deviation (- 2,666 million) was found in the Other indirect taxes included in the new figures, both those that came into force and those that were expected to be approved and eventually did not come into operation. The first is the Financial Transaction Tax and the Tax on Certain Digital Services, which, between them, raised 1,356 million less than expected (some reflections in this regard are made in the 3 Informative Note and in the 4 Briefing Note). The second is the Plastics Tax for a Only Use and the Tax on Waste that did not come into force, but which were accounted for in the PGE-21 with an amount of 1,341 million.