Effective rates

It is estimated that the average effective rate on income and spending in 2023 was 15.4% (Graph 1.25), which implies an increase of 1.4% compared to 2022 ( Table 1.3 ). The estimate is provisional until the year 2023 is completed with the annual Personal Income Tax and Corporate Tax returns, which will be known, for the most part, between June and July. The evolution of the rate in income and spending was very uneven. The average rate associated with income increased by 3.3%, driven by increases in rates on salaries and pensions as a result of the increase in average income, and by the higher average rate in Companies, due in part to regulatory changes. . For its part, the average rate associated with spending decreased by 1.7%, due to the reductions in the VAT rate on certain foods.

In Personal Income Tax the effective rate rose by 2.8%, 1.3% without the differential fee ( Table 2.1 ). As already mentioned, this increase was due to the positive evolution of average incomes in salaries and pensions, caused by the revisions derived from the inflationary process that began at the end of 2021. It must be taken into account that the reduction in the rate for the lowest incomes has conditioned the evolution of the effective rate, which would have grown more in its absence. Furthermore, the greater weight of income associated with unemployment benefits, with very low rates, has also pushed its trajectory downwards.

The effective rate on the corporate tax base increased by 2.5%, if the effect of the estimated tax for the year is taken into account. Without the quota, the rate would have been reduced by 4.9% ( Table 3.1 ). In the case of the profit rate, it is expected to rise by 10.8%.

The effective VAT rate is estimated to have fallen by 4.4% to 14.3%, the lowest level in the last eleven years ( Table 4.1 ), as a consequence of the regulatory changes that had an impact on its evolution, mainly the reduction in the VAT rate on food, to which are added the additional reductions on electricity and natural gas, wood and pellets, and the rate reduction on feminine hygiene products and contraceptives. The joint impact of these measures would add up to 2,452 million ( Table 1.5 ).

The average effective rate on Excise Taxes, calculated as the proportion of the tax accrued with respect to the value of consumption, increased by 15.8%. As noted in all reports, this type is included only for the purpose of completing the analysis of bases, types and income, but it is not the type that is applied (in several figures the base is made up of physical consumption and only in two - tobacco and electricity - value matters). Furthermore, in the absence of regulatory changes, this effective rate moves in the opposite direction to the prices of energy products, which determine the value of consumption. Thus, in the case of hydrocarbons and electricity, which recorded price falls in 2023, the average effective rate increased. In the rest of the subject products, the average effective rate was reduced.