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 2021 were 15.1% higher than in 2020, reaching an amount of 223,385 million euros. 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 2021 fell by 3.1%, which meant 1.68 billion less.
Also, in Table No. 13. Total net tax collection and in Chart No. 14. Evolution of tax collection managed by the Tax Agency (Annex), this information is developed.
Compared to a year as negative as 2020, the high growth rate does not give a good idea of how tax collection will perform in 2021. The comparison with 2019 helps to make a better assessment. In this sense, 2021 income was 5% higher than two years ago, with positive results in the main figures (IRPF, Corporate Tax, VAT) with the only exception of Special Taxes. The main reason for the increase in revenue was the recovery of tax bases, whose growth is provisionally estimated at around 13%, exceeding by around 4% the growth observed in 2019. On the other hand, the numerous measures of different kinds that had an impact on revenue did not represent, in net terms, a significant figure.
Table No. 15. Adjustments for the impact of regulatory changes (Annex) presents, in detail, the measures that took effect during the year and their impact on the different taxes. It can be seen that the regulatory and management changes that affected revenues in 2021 were numerous, but, as mentioned, their joint impact in net terms was not very relevant and is estimated at -501 million.
The measures can be grouped into four different blocks: the group related to the measures that were implemented throughout 2020 to combat, in different ways, the effects of COVID (in the table they would include the first four sections); a second block that would contain the regulatory changes included in the PGE-2021; A third set of measures would be approved in order to mitigate the impact of rising electricity prices; and the last group would collect extraordinary income and returns. It should be noted that the perspective of the table is always to try to correct all those elements that may distort the rate of variation in income and, therefore, not only measures from 2021 are included, but also those that, being from 2020, alter the comparison with 2021. This approach particularly affects the first and fourth groups mentioned above.
As can be seen in the table, the measures that had the greatest impact in 2021 were those related to the price of electricity. In total, the reduction in income resulting from these measures was 1.605 billion. The first measures were approved at the end of June and involved a reduction in the VAT rate (from 21 to 10%), applicable to electricity consumption in contracts whose contracted power was less than 10 kW (basically domestic consumption), and the suppression of the third quarter of the Tax on the Value of Electrical Energy Production. Both measures meant a loss of income valued at 1,269 million (509 million from VAT for the June-October period, and 760 million from the Tax on the Value of Electrical Energy Production for the third quarter). Subsequently, in mid-September, the measures were expanded by adding a rate reduction (from 5.11% to 0.5%) on the Special Tax on Electricity and extending the elimination of the Tax on the Value of the Production of Electrical Energy to the fourth quarter (this last measure no longer having effect in 2021 since that quarter would have been paid in February 2022). The impact of the reduction in the rate of the Special Tax on Electricity is estimated at 336 million for consumption between September 15 and the last day of November, which is the period accounted for in 2021 revenues.
The second block of impacts by quantitative importance is that of the measures approved in the PGE-2021, which meant an increase in revenue of 1,462 million. Three groups could be distinguished. The first is related to rate hikes and includes three measures: the increase in the general base rate of personal income tax aimed at higher incomes (with an impact of 131 million in withholdings that will be completed in June of this year when the annual declaration is submitted); the change to the general rate of VAT on sugary drinks (314 million for the first ten months of validity); and the increase of two points (from 6 to 8%) in the rate of the Tax on Insurance Premiums (476 million for the period January-November).
Within the measures of the PGE-2021, the second group would be made up of the two new taxes: the Financial Transactions Tax and the Tax on Certain Digital Services. Both figures came into effect at the beginning of the year, but with the obligation to pay the amounts accrued since January 1. The impact on 2021 tax collection was 462 million (296 from the January-November period in the first case and 166 from the first three quarters in the second).
Thirdly, a measure that was also included in the 2021 PGE is the limitation to 95 percent of the exemption of income from participations in profits or from the transfer thereof in Corporate Tax for companies with a turnover exceeding 40 million euros. In 2021, the measure was applied to instalment payments and is estimated to have resulted in an increase in revenue of 79 million. The impact was small because most of the affected companies paid taxes in 2021 through the minimum payment that depends on profits and not on the tax base, which is the one modified by the rule. In fact, it is estimated that the tax base raised by the measure was more than 1.65 billion and less than 15 percent of this corresponded to companies that paid taxes according to the base. The effect of the measure was completed when the year was settled in the annual declaration, which in most cases was submitted in July 2022. According to the information in these statements, the total impact was 412 million and, therefore, its impact was spread between 2021 (79 million in payments) and 2022 (333 million in the differential quota). The increase in the base due to this measure was 3,269 million, of which 2,153 resulted in a higher tax and 1,117 corresponded to companies with a zero tax base.
The impacts derived from extraordinary income and returns subtracted 824 million. This is a very heterogeneous group that includes both refunds actually made in 2021 (473 million for single provincial VAT records and 94 million for rulings in the Non-Resident Income Tax), as well as the differential impact caused by some measures that are carried forward. from the past (maternity benefits, interest as a result of the ruling of unconstitutionality of Royal Decree-Law 2/2016 on installment payments) or from the income from the Corporate Tax records that occurred in 2020.
In last place would be all the measures linked to COVID implemented in 2020 and which affected in different ways the comparison of income between 2021 and 2020. In total, these measures amounted to 466 million. The most relevant are those related to the liquidity of companies that were in force in 2020 (also in the first quarter of 2021, but with a much smaller impact). The aim was to facilitate the payment of tax obligations by deferring them. This reduced the collection in 2020 (due to the amounts not collected before the end of the year) and therefore had a positive impact in 2021. Secondly, there are the support measures for SMEs, measures that took various forms (in particular: changes in the modality, elimination of days in a state of alarm in the calculation of the modules and increase of the general reduction from 5 percent to 20/35 percent in the objective estimation of income). The changes had a negative effect on the VAT of the simplified regime and on the installment payments of personal income tax in 2020 and in the first payment of 2021, although the greatest impact was observed when applying the new general reduction in the annual personal income tax declaration (-195 million, including the remaining impact of the elimination of days in a state of alarm). And a third element to highlight within this group of measures was the rate reductions on COVID-related products (masks, vaccines, PCR, etc.). In this case, the impact is less than one might think when calculating in differential terms with respect to the previous year when some of the measures were already in force.