The Government acknowledges the failure of the 2021 tax increase while preparing another in 2022




The General State Budgets (PGE) of 2021 were approved truffled with tax measures. Increases in personal income tax for high incomes, increased taxation of sugary drinks, insurance premiums … a cluster of decisions that have soon proven to be failure. And the Government also recognizes it in the accounts that have entered the Congress of Deputies today for 2022.

Next year’s PGE yellow book includes that the set of measures approved last year will increase revenue by 1.45 billion euros in 2021. The intention was that the figure would reach up to 3,230 million this year, with an impact adding deferred effects of subsequent years of a total of 6,085 million.

Thus, this year 55% less than expected by the 2021 tax hike. «This year the measures approved in the previous Budget have come into force (the increase in rates in personal income tax at high incomes, in VAT for sugary drinks and in the Tax on Insurance Premiums and the limitation of the income exemption from the foreign in Corporation Tax) and new taxes (Tax on Financial Transactions and Tax on Certain Digital Services). Together, these measures will increase revenues by more than 1,450 million ”, says the Government in the aforementioned document.

For this 2021 the expected collection stands at 214,995 million euros. An amount that represents 10.8% more than the year of the great health crisis, 2020, although in detail it is glimpsed that revenues have not advanced at the expected rate. “Regarding the comparison of the collection estimated for 2021 at the moment and the one expected in the 2021 Budgets, the income will be lower than the budgeted by 3,625 million”, reads the yellow book, to add There are three reasons for this lag: the lower rate of recovery of income related to spending, lower income from regulatory changes and the negative impact of measures aimed at reducing the cost of electricity. Likewise, the decrease with respect to the forecast would be even greater if it were not for the fact that the arrival of European funds has risen with respect to the budgeted 9,300 million compared to the 6,800 that were initially expected.

Under this scenario, the Minister of Finance, María Jesus Montero, has detailed that the accounts for 2022 will also have tax measures to try to increase collection, which he predicts will reach a historical record. Among the decisions that appear in the PGE project are the minimum rate in Companies and the reduction of deductions for contributions to individual pension plans.

The tax revenue forecast for 2022 remains, according to the project, at 232,352 million, 8.1% more in year-on-year terms, marking a collection record. Montero has highlighted the “good progress in tax collection”, which would be in line with “the improvement of the economy.” In this sense, the minister has commented that Spain is in a phase of growth and job creation, which would intensify in 2022. However, Montero repeats his speech last Thursday when an agreement was reached for the Budgets: he maintains that in his forecasts have been prudent and conservative.

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