3.2. Net tax collection
The net tax collection is the gross revenue net of refunds paid, including adjustments with the Basque provinces and Navarre. Moreover, it corresponds, to recording on a cash basis, unlike other items such as recognised rights or taxes for the purpose of National Accounting.
Tax revenues in 2019 amounted to 212.808 billion euros, 2 percent higher than in 2018. The difference between the growth in net and gross income analysed in the previous section can be explained by the evolution of the returns made, which in 2019 exceeded those of the previous year by 4,431 million, achieving a year-on-year growth of 9 percent. This sharp increase is also conditioned by regulatory and management changes. Without them, returns would have grown by only 2.8 percent.
Also, in Table No. 13. Total net tax collection New window and in Chart No. 14. Evolution of tax collection managed by the Tax Agency New window (Annex), this information is developed.
As already mentioned, the year was characterised, among other factors, by the impact of regulatory and management measures which led to a reduction in income of 3,788 million (almost 70 percent due to extraordinary returns, regardless of the evolution of bases and taxes). Without this impact, revenues would have increased by 3.8 percent, a rate slightly higher than the growth rate of domestic demand (3.4 percent) and equal to the increase estimated for tax bases in 2019, which, as noted, also stands at 3.8 percent.
The figure in which the regulatory and management changes had the greatest effect was personal income tax (-2,748 million), as a result of modifications that came from 2018. The measure that had the greatest impact in the year was Supreme Court ruling 1462/2018 of 3 October 2018, which declared income received in the form of maternity and paternity benefits exempt from tax and, therefore, required the return of the tax paid on them in non-prescribed years (2014 to 2018). Refunds for the 2014-2017 financial years began to be paid in December 2018 and continued throughout 2019 (-1,046 million differential impact). Likewise, the withholdings that had been made until October 2018 were adjusted in the differential quota of the tax settled in 2019 (-470 million). In addition, the withholdings associated with these benefits were no longer made since November 2018, which also resulted in a loss in this regard (-100 million). The rest of the measures have their origin in the General State Budget Law for 2018, which approved the modification of the reduction for work income for low incomes (-648 million), expanded family deductions (-467) and progressively raised the exempt threshold in the taxation of lottery prizes (-17).
In the Corporate Tax, the negative impact amounting to 1,216 million was the result of the existence of extraordinary refunds (not linked to the normal evolution of the tax), derived either from rulings or from different payments for the conversion of deferred tax assets (known as DTA) into payable credits against the Tax Authority.
Regarding VAT, there are two small impacts. The first is a residual effect resulting from the introduction of the SII in 2017, caused by the shift that occurred in 2018 over the months in the date of payment of some taxpayers, from the 20th (which was the deadline before the SII) to the 30th (in force since the then new system began). The impact, positive, was estimated at 98 million at the time. The second quantifies the effect of the rate cuts in cinemas, also starting in July 2018 after the approval of the Budget and with repercussions, for the most part, in 2019 (-37 million).
The measures had a positive impact on excise taxes, amounting to 1.025 billion. These are two measures: the incorporation of the old regional rate and Royal Decree-Law 15/2018 into the special rate for the Hydrocarbon Tax. As regards the first, it should be remembered that the regional rate (together with the special state rate) served to integrate, from 2013, the Tax on Retail Sales of Certain Hydrocarbons into the Tax on Hydrocarbons. With effect from 1 January 2019, a new change was made, which consisted of adding the previous regional rate to the special state rate (since then simply the special rate), which increased the State's income (before participation), but without modifying the joint income of the State and the Autonomous Communities. (except for the fact that, upon integration, the rates were harmonized in all the autonomous communities. equalizing them at the maximum rate and, consequently, increasing total income). This is the reason why, although it does not affect the joint income of the PAs, this impact has been included during the year. The total result of the measure, including the effect of associated refunds, was 1.163 billion. Regarding Royal Decree-Law 15/2018, it classified as exempt, since October 2018, the consumption of natural gas, diesel and fuel oil used in the production of electrical energy. The effect of the decree in 2019 is estimated to have reduced revenue by 138 million. The same regulation included other measures aimed at influencing the formation of electricity prices. One of them was the temporary elimination of the Tax on the Value of Electric Energy Production, which meant the loss of the collection of this tax corresponding to the last quarter of 2018 and the first of 2019, both to be paid in 2019. The impact of this elimination of the tax is valued at 762 million.
Finally, it is necessary to take into account an extraordinary refund derived from a court ruling on the Tax on Inheritances and Donations (-124 million) and the reduction in rates on the Tax on Fluorinated Gases, approved in the 2018 Budget and in force since September of that year, with a collection cost in 2019 of 24 million.
The main figures are given in Table No. 15. Adjustments for impact of regulatory changes New window (Annex).