The slowdown in activity while employment continues to rise is reflected almost mimetically in tax collection in the first half of the year, with a good evolution of taxes linked to wages and a stagnation of indirect taxes more linked to activity. Personal income tax and corporate tax support the growth in collection between January and June (5% in homogeneous terms) after the VAT and excise tax break.
The improvement in wages and employment, together with the good evolution of corporate profits, boost income from Personal Income Tax and Companies by 10%. On the other hand, the weakness of consumption leaves the increase in indirect taxes (VAT and special) at 0.2%, as can be seen in the graph. The data is always in homogeneous terms.
"VAT and specials have stopped, which is linked to the fact that consumption stops," reflects the director of Fedea, Ángel de la Fuente. In the national accounting data for the second quarter, there was an interannual growth in household consumption of 0.5%, which is 1.2 points less than in the previous quarter.
The VAT figures are also influenced by the Government's measures to reduce the tax on certain products to deal with inflation. According to the AEAT, VAT collection fell by 1,612 million "as a result of the reduction in rates on electricity, natural gas, wood and pellets, and on basic foods and feminine hygiene products." The AFI analyst, César Cantalapiedra, explains that "VAT has a more cyclical behavior and its evolution is also very marked by the deleveraging process that families are carrying out and also by the slowdown in activity."
Next year the VAT slowdown could be offset by the reversal of the measures implemented by the Government in energy and other sectors, reflects Cantalapiedra. In addition, the resurgence of fiscal rules in the EU will make it difficult to maintain these VAT rebate measures.
As for excise taxes, the collection remains in homogeneous terms thanks to the implementation of the new Tax on Non-Reusable Plastics. Otherwise, there would be a 2.8% decrease in collection until June.
What continues unstoppable is the income tax collection that essentially taxes wages. The data from the AEAT show that the impact of the reductions for taxpayers was very small: 396 million out of almost 50,000 million in income due to "the increase in the general reduction for work income for low incomes, the extension of the assumptions for apply the deduction for maternity or the measures related to the income of personal companies”.
According to the Treasury, the improvement in personal income tax income is due to the more intense increase in employment and wage increases (which are around 5%) and the increase in the effective rate. This means that some taxpayers will pay a higher rate as a result of the salary increases they have obtained. If there is no rate deflation in those cases, you end up paying more taxes. Only about half of the communities carried out deflations of their corresponding regional rates.
The director of the situation of Funcas, Raymond Torres, reflects that the good performance of the income derived from salaries is due to the fact that "in the IRPF there is a more delayed effect because there was an increase in income and the rate was not deflated or it was did little." In his opinion, "the evolution can be seen a year later" so he expects that "IRPF will end up slowing down as well" as is happening with VAT. "We will no longer see that strong growth," he adds.
If total revenues (not homogeneous) are compared, the 11% growth in this semester is only surpassed by the same period of the previous year. If not, it is necessary to go back to 2008 when it grew by 15% as a result of the real estate bubble that was about to burst. "It is difficult for personal income tax to continue going at this rate," concludes Cantalapiedra.
