3.2.1. Evolution of income for Personal Income Tax

Income from personal income tax grew by 4.9 percent in 2019, although without the regulatory and management changes that affected the tax, growth would have been 8.2 percent. The two components that best explain the evolution of the tax are the withholdings from work and the amount to be paid in the annual declaration.

Income from withholding taxes on work and economic activities grew by 5.4 percent in 2019, 6.5 percent if the impact of regulatory changes is eliminated. Overall, the trend was towards moderation (up to mid-year, cumulative growth was 5.9 percent), but with different phases and with different intensities in the private and public sectors. In the private sector, revenues increased by 5 percent, while in the AA. Administrations the rate was 6.5 percent.

As regards the results of the annual declaration (corresponding to the 2018 financial year, settled in 2019), income grew by 14.1 percent, despite the fact that some of the measures (extension of family deductions and refund of the withholdings made on maternity benefits in 2018) acted negatively (without them, the growth of this income would have risen above 18 percent).

As for the rest of the concepts, four elements stand out: the growth of split payments at a rate similar to that recorded in the previous two years (7 percent); the increase, for the second consecutive year, of withholding taxes on capital income (4.2 percent), despite the new decrease in interest on bank accounts; the stabilisation of income from withholding taxes on capital gains from investment funds after the sharp decline last year; and the reduction in revenue from the Lottery Tax (-15.2 percent), most of which is not justified by the increase in the tax threshold.

Evolution of income for Corporation Tax

Corporate tax revenues decreased by 4.4 percent in 2019 due to extraordinary refunds; Without them, revenue would have increased by 0.5 percent. In addition to the aforementioned refunds, the most notable fact was the considerable decrease in instalment payments (-6.3 percent), a drop that is concentrated in the second payment and is mainly explained by the exceptional performance of five large groups. The decline was offset by a 10 percent increase in revenue from the 2018 annual declaration, settled in 2019, and by the lower amount of refunds made in 2019 corresponding to the 2018 campaign.