5. Special Taxes
Special Taxes were the ones that, among the main figures, were the worst of results in 2021. Income from these taxes grew by 5% to €19,729 million, and by the end of the year they were still 7.7% lower than the figure for 2019. This joint result influenced very different factors. In Hydrocarbons Tax, revenues increased by 11.3%, but in 2020 they had fallen by 15.8%. Its evolution throughout the year was gradually improved, but not with the pace enough to reverse the decline of the previous year. The mobility limitations that still existed at the end of 2020 and the first months of 2021 and the effects of the Filomena storm at the beginning of the year, together with the sharp rise in prices, weighed the recovery. The fall recorded in the Tobacco Products Tax (- 2.1%) is the fifth consecutive year. Consumption remained practically stable, and average prices decreased (due to the higher consumption of cheaper varieties), although in the last quarter there were increases in the most representative brands. In the Electricity Tax, the drop in income (- 12.2%) is explained by the drop in the rate in force since mid-September and for which an impact of 336 million is estimated. With this amount, income would be approximately at the same level as in 2019, with higher prices than those at that time. In alcohol taxes, after a very negative start due to poor consumption data from the end of 2020, they were recorded high rates that led to growth in the year at 7%, but revenues never exceeded those of 2019 (- 12.9% compared to that year).
In 2021, all the consumption of products subject to excise duty increased. (Table 5,1), driven by the easing of mobility restrictions and other limitations, growing more intensely in in cases where the incidence of the pandemic was higher in 2020, such as gasoline and gas oils (11.4%) or alcohol (33.2% the highest rate). Beer consumption (7.5%) and electricity consumption (2.7%) also increased, while tobacco consumption remained practically stable (0.4%, 0.2% of cigarettes). However, these growth was not enough to reach levels of 2019 in any product.
The factor highlighted in 2021 was the price rally, especially in the end of the year, highlighting the increase in energy prices with very intense increases since March. Thus, the average price of petrol and gas oils grew by 18.5% (29.9% before tax; Table 9,1) due to the increase in demand throughout the year, and the global tensions that drove the price of the oil barrel in euros to rise above 65%. In electricity, the pre-tax increase was 14.8%, although the price of sales to the public fell to 7.4% thanks to the radical reduction in the rate that took place in mid-September (Table 5,7). Meanwhile, the average prices of alcoholic beverages barely changed compared to the previous year (Table 5,2) and in beer the the increase was minimal (0.6%, Table 5,3), while the average selling price to the public of tobacco products fell 0.7%, as the increase in the price of the other tasks was not enough to offset the lower average price of the packets (Table 9,2). Consequently, the value of products subject to excise duty (Before VAT), it increased by 19.9% thanks to the process of recovering consumption and the significant rise in energy product prices (Tables 1,3 and 5,1).
As for effective rates, the only regulatory change in 2021 was the drastic reduction in the rate in Electricity Tax since mid-September (from 5.11% to 0.5%). The estimated impact of this reduction in 2021 is €336 million (Table 1,5). However, as can be seen in Table 5,1, there have been other variations in rates. The changes in the effective rate of petrol and gas oils in the last two years are noteworthy, due to changes in the composition of the consumption of the different products. Thus, the largest drop in 2020 of products with the highest rate, such as petrol, resulted in a drop in the average rate, while in 2021 the opposite effect occurred. This composition effect is also observed in the variations in the excise duty per litre of beer.
Special Taxes accrued grew by 7.1%, and it was even more than 1,500 million below the level reached in 2019 (- 7.1%, Table 5,1). Taxes on alcohol and on hydrocarbons increased in line with the recovery of consumption, and also the Electricity Tax had done so if it had not been weighed down by the rate reduction. In fact, in the absence of a change in type, this figure would have been the only one to remain at levels similar to those recorded two years ago. Of the €1,500 million lower than in 2019, more than €700 million are concentrated in Hydrocarbons Tax and more than 300 in the Tobacco Products Tax, for which stagnant consumption and lower prices are combined. The Coal Tax falls one year more as its use as a raw material for generating electricity is very residual.
The Hydrocarbons Tax increased by 13.6% (Table 5,5) following the sharp drop in 2020. The increase exceeds almost two points in consumption due to the rise in the average rate resulting from the increased use of products taxed at higher rates. As with other taxes, the evolution over the year is almost a reflection of what happened to the previous year, with a first quarter in which the decrease was maintained due to the impact of Filomena and the restrictions still in force due to the pandemic, a second quarter of strong recovery in response to the drastic fall of 2020, followed by a final half in which the increase in prices partly halted the progress of consumption. Gasoline, a product more linked to consumption, grew by 24.1%, with only 1.9% below the pre-pandemic level, while that the automotive oil, more related to transport, despite increasing by 11.5%, remained at very lower levels of consumption at the previous years (we must go back to 2014 to find a lower level of consumption).
The accrued Tobacco Tax fell 0.8% in 2021 (- 5.0% compared to 2019, Table 5,6), due to the stagnation of consumption and lower prices. The decrease was higher in cigarettes (- 0.8%), than in the rest of the tasks (- 0.5%), which broke the growing trend seen in the last three years. This new decrease leaves the tax at levels substantially below the average observed in the period 2013 to 2019.
Electricity Tax decreased by 20% (Table 5,7), weighed down as already mentioned by the sharp drop in the rate (from 5.11% to 0.5%), which came into force in mid-September. Consumption grew in 2021, but the most notable was the sharp price increases in the wholesale market that have intensified since mid-year. Before the drastic reduction of the rate, the increase in the tax accrued and, therefore, in income was not so intense , in addition to the offset between consumption and invoicing, because other elements are involved in the invoice that soften the impact from the rise in prices in the wholesale market and because the percentage of consumers on the free market is high.
Alcohol tax recorded a significant advance in 2021 (33.2%; Table 5,2), which however was not enough to counteract the intense fall of the previous year, so that it remains almost 5% below the amount reached in 2019, conditioned by the situation of the hospitality and catering sectors, which were subject to year to restrictions and that have not yet recovered from the impact of the pandemic. In the case of Beer Tax, there is a similar appearance, with an increase of 2021% in 8.7 (- 2.2% compared to 2019; Table 5,3).
The Coal Tax decreased again by 9.4%, to 31 million. As mentioned in other reports, this figure has a residual role in the system, once the use of coal in the generation of electricity by the largest producers has been abandoned.
The Special Taxes collection increased by 5% to 19,729 million, 7.7% below the amount raised in 2019 (1,651 million less; Table 5,1). Its growth is more than two points below that corresponding to the tax accrued due to the shift in the last 2020 accruals (more affected due to the crisis) to the 2021 cash desk and, of the last accruals of 2021, which reflect the best consumption performance, to the 2022 cash desk. This is particularly relevant in Hydrocarbons Tax (11.3%, more than two points below accrual) and in alcohol taxes (7% in cash versus 13.5% of accrual).
In the Electricity Tax, however, the effect is the opposite (- 12.2% in cash and-20% in accrual) due to the reduction in the rate in the final tranche of the year.