2.2. Net tax collection

The net tax collection is the gross revenue net of refunds paid, including adjustments with the Basque provinces and Navarre. It is therefore set on a cash basis, unlike other items, for the purpose of National Accounts, like the recognised rights or the taxes

The tax revenues managed by the Tax Agency rose in 2012 to 168,567 million, with a 4.2 per cent growth with regard to 2011, practically coinciding with the ones budgeted (159 million less). The degree of compliance with what was budgeted was the result of the influence of factors of different signs: the taxable incomes of the main taxes were less than what was planned, but this negative factor was compensated by the impact of regulation measures carried out in the middle of the budgetary year and by the increase of the collection derived from control actions.

(Millions of euros)

Annex:

The added taxable base dropped for the fifth consecutive year, this time by 3 per cent, a drop similar to that of 2011. The drop takes place with great consequence in incomes (due to the contraction of the incomes of homes and companies' profits) and in the expense subject to Value Added Tax, harmed by the lowering of consumption, purchases and government investment, and the persistent deterioration of the real estate market.

Annex:

The collection increased due to the impact of the regulatory changes, both of those that were already foreseen when elaborating the Budget and of those that were approved in July 2012, whose effects on the collection were noticed in the final stages of the financial year. The fiscal consolidation measures generated an 11,237 million income increase. Of this amount, the portion raised due to the changes introduced in July is calculated to be 5,119 millions, especially from the increase in excise tax rates of the Value Added Tax and the measures of expansion of the staged payments of the Corporation Tax.

Throughout the year, as it is detailed in the following table, we can clearly see the collecting impact that the measures had that affected the staged payments of the Corporation Tax (5,925 million). The effects of the Supplementary Tax were also very relevant (with implications in the incomes from the Personal Income Tax, the Corporation Tax and the Non-Residents Income Tax, reaching 3,931 million), of the Value Added Tax rise (2,441 million) and of the extraordinary measures related to the Special Tax Return (1,196 million) and to the Special Tax on Dividends (89 million).

Along with the impact of the regulatory measures, the growth in collection was also favored by the significant increase in income from deferrals from previous years and control actions. Income from these concepts amounted to 16,103 million in 2012, with an increase of 19.6 percent compared to the previous year. Just over half of this income corresponds to control actions, which grew by 10.1 percent in 2012.

Personal Income Tax

Regarding the evolution of income from the main taxes, in 2012 the collection of Personal Income Tax grew by 1.2 percent (815 million). The growth is explained exclusively by the impact of fiscal consolidation measures (3,525 million). Without these measures, income would decrease by 3.9 percent, the same drop estimated for gross household income. Within these, labor income fell by 3.6 percent (with a greater drop in the wage bill partially compensated by the increase in pensions), capital income by 6.4 percent and company income personal above 5 percent. The quantitatively most important component of household income, the wage bill, was notably reduced (6.2 percent) due to the sharp decline in salaried employment and the reduction in the average salary, with greater intensity in the public sector due to the suppression of December extra pay. The increase in withholding rates served as a counterweight to this drop in income, such that income from withholdings was almost the same as in 2011.

Corporation Tax

Income from Corporate Tax grew by 29 percent in 2012 (4,824 million). The growth is explained both by regulatory measures and by the increase in income from inspection reports. The regulatory modifications very significantly affected the calculation of payments on account, which grew by 41.3 percent, with a special impact on consolidated groups (84.8 percent). In the rest of the large companies, the increase in payments was 26.3 percent, while in SMEs, which calculate their payment according to the quota of the last annual declaration presented, the drop was less than in 2011 (6 .1 percent).

The increase in income from Corporate Tax occurs despite the fact that the information available on profits indicates that they continued to fall. To analyze the benefits in 2012 from the tax returns, it is necessary to correct the impact of the regulatory changes, which affected not only the rate but also the tax base, raising it. Once this correction has been made, there is a drop in the tax base similar to that registered in 2011 (19.6 compared to the previous 18.7 percent). This result is not uniform by type of company: Consolidated groups showed a decrease close to 50 percent (which is not observed in payments due to regulatory changes) while large companies not integrated into groups registered a positive rate of around 3 percent.

Value Added Tax

Value Added Tax collection in 2012 grew by 2.4 percent (1,162 million). It is estimated that the final expenditure subject to Value Added Tax, which is the base of the tax, fell by 5 percent in 2012, a drop somewhat lower than that registered in 2011 (5.8 percent). By components, household consumption spending decreased by 3.2 percent. In housing spending there was again a sharp decrease (14.2 percent), although lower than that of 2011 (28.8 percent). There was better performance at the end of the year, but for temporary reasons due to the tightening of the tax burden starting in 2013 (end of the deduction in the Personal Income Tax for the acquisition of new homes and increase in the Tax rate on Added Value from 4 to 10 percent). A drop of 8.9 percent was observed in Public Administration spending, which rose to 24 percent in the case of investment spending. The increase in the effective rate, due to the increase in legal rates that came into force in September, explains, together with the decrease in refunds, the increase in collection.

Excise Taxes

Finally, Excise Tax revenue decreased in 2012 by 4.1 percent, approximately the same as in 2011. The greatest loss is recorded in the Hydrocarbon Tax, which decreases by 7.5 percent (in 2011, 6.3 percent), due to the reduction in gasoline and diesel consumption. The fall in economic activity and the increase in prices (less than in 2010 and 2011 but still above 8 percent) explain the lower consumption. The Tax on Tobacco Products decreased by 2.6 percent, almost the same as in 2011 (2.3 percent). However, the composition of this fall is different: The decrease in consumption has not been as intense as in 2011 (10 percent compared to more than 17 percent in the previous year) and the increase in prices has been less than then (7.5 percent compared to 13 percent of 2011). The Electricity Tax is the only figure that shows a significant increase (9.8 percent). Electricity consumption suffered a new drop in 2012 of 1.3 percent, so the increase in income must be attributed exclusively to the increase in rates, accentuated in the last part of the year by the execution of the sentences that forced impact on invoices the price update of the final part of 2011 and the beginning of 2012.