A headquarters of the Tax Agency.
The collection of the Tax Agency grew by 13.7% until May, driven by the economic reactivation and progress in the vaccination process. Income from personal income tax increased by 8.3% and VAT collection also increased by 5.9%, one of the most affected taxes during the confinements, according to data published this Wednesday.
If you only consider the income of the month, the fall has been 16.4% compared to 2020, because last year income that should have been collected was moved to this month, while at the same time, deadlines for the tax debts and requests for deferrals were made more flexible. After correcting these three elements, homogeneous revenues in May grew by 31.2%.
The Tax Agency also recalls that in the same period of the previous year, income was “extraordinarily low” due to the declaration of the first state of alarm and the closure of the activity. For this reason, it also compares the results with the same period in 2019: in this case, the collection has been 3.5% higher, with an annual growth somewhat higher than 1.7%. “This rate is relatively low in historical terms, which indicates that the recovery is not yet complete and that there is room for further growth,” he adds. Taxes such as the Tax on Hydrocarbons are an example of this: although the income provided by this figure has grown strongly in recent months, they are still well below the levels that were reached before the pandemic.
Regarding corporate tax, which in May does not usually have relevant income, the presentation of the first installment payment represented a jump of 60.8%. This rate is very high both when compared with the bad data of 2020 as if it is related to 2019. The Tax Agency clarifies that some 1,100 million were obtained by a merger operation between groups, but, even eliminating this impact, the data is above that of 2019. “The origin of the growth of these revenues was in the increase in profits and the tax base (around 24%, corrected the atypical) in the first quarter of the year and in the greater weight that it had the minimum payment in the groups ”, indicates the organism.
The deficit until April falls to 1.8% of GDP
The consolidated deficit of Public Administrations, excluding local corporations, stood at 21,910 million euros at the end of April, equivalent to 1.81% of GDP, after reducing 23.4% compared to the same period of the previous year in the that the effects of the pandemic were already being felt. According to data published this Wednesday by the Ministry of Finance, most of this deficit is attributable to the State, with an imbalance of 16,058 million, equivalent to 1.33% of GDP, when a year earlier it reached 1.77%.
The Treasury has also published the State deficit until May, which continues the downward path started in April with respect to the same period of the previous year, with a reduction of 6.3%, to 30,628 million (2.53%) of the GDP. The ministry attributes the reduction to the economic reactivation due to the advance of the vaccination process, although it also influences that in the year-on-year comparison the months of the state of alarm of 2020 are already entering in which a greater budgetary effort was made to protect incomes and the productive fabric in the face of the crisis caused by covid-19.
Until May, State revenues increased by 11.1%, to 69,464 million, while expenses grew by 5.1%, to 100,092 million. The collection from taxes grew by 16.8% year-on-year, to 58,442 million. The increase in spending was mainly due to transfers between public administrations, which amounted to 62,002 million, 10.5% more than in 2020. The transfers destined to Social Security funds stand out, reaching 11,677 million, 3,736 million more than the previous year.
The amount of State expenditures related to the pandemic was 5,074 million, of which 4,765 million were for transfers to communities and 308 million for intermediate consumption, which correspond almost entirely to vaccines. The compensation of employees grew by 3.2%, to 7,262 million, which incorporates the salary increase for this year of 0.9% compared to the salary increase of 2% in 2020. Interest accrued on public debt grew by 3, 7%, to stand at 9,576 million.
Community deficit and City Council surplus
The autonomous communities registered a deficit until April of 3,161 million, which is equivalent to 0.26% of GDP, compared to 0.05% a year before, due to an increase in expenses of 4.2%, while the income remained stable. Most of the autonomous regions registered deficits until April, with Murcia (0.96% of its GDP), the Balearic Islands (0.56%) and Andalusia (0.54%) leading the way. Asturias, Castilla y León, Extremadura, Navarra and the Basque Country registered a surplus, while Madrid was in equilibrium (zero deficit). According to the information transmitted by the autonomous communities to the Treasury, the impact of the social health expenditure derived from the covid-19 amounted to 2,509 million until April.
Local entities registered a surplus of 499 million until March, which is equivalent to 0.04% of GDP, compared to the deficit of 236 million in the first quarter of 2020. With these data, the deficit of all public administrations in the first quarter The quarter of the year was 1.30% of GDP, compared to 0.98% a year earlier.