The new general director of the Tax Agency, Soledad Fernández, linked this Wednesday the sustained increase in tax collection that has been experienced for months to the improvement of voluntary compliance by taxpayers (that is, the correct payment of taxes on time and form), downplaying the impact of inflation, which has reached unprecedented heights in decades. During an appearance in the Budget Committee of the Congress of Deputies, Fernández recalled that, between 2016 and 2021, there has been growth of more than 11 points in the aggregate tax bases, above nominal domestic demand. Could there be other factors [que explican el alza]?”, has nuanced. “Can inflation influence? Also. But we cannot understand that all this growth is because of her.”
Several deputies had asked about the impact of inflation on collection to the director of the Tax Agency, who in June replaced Jesús Gascón, now Secretary of State for the Treasury. This is because the Government has projected record tax revenue for 2023 in the General State Budget project —261,781 million, 7.7% more—, despite lowering GDP growth, and has improved the closing forecast for 2022. In addition, in the Budget Plan that he has just sent to Brussels, he draws an alternative scenario of income and expenses, which includes an extra margin of some 20,000 million euros between 2022 and 2023.
Meanwhile, collections are growing at a double-digit rate. More than 18% until August. The latest report from the Tax Agency indicates that there are several factors behind this evolution. The rise in prices is one of them, especially for those figures linked to consumption. “In VAT, the partial effect that inflation can have is greater”, explained Fernández. “In personal income tax or corporate tax it is not so direct (…), and there has been a very significant increase,” he clarified, after confirming that the body is preparing a study to measure what part of the improvement is due to inflation.
On Tuesday, the president of the Fiscal Authority (Airef), Cristina Herrero, affirmed that half of this year’s rise in income is due to inflation, and that this percentage will reach 75% in 2023. During her appearance before the same commission, Herrero disgraced the Government for having underestimated the public revenue forecasts in the accounts for next year, as has been made clear in the Budget Plan, and at the same time not having included the expenses of the future anti-crisis measures that the Executive has planned announce in November.
Fernández has listed other elements, in addition to voluntary compliance, that may be driving the improvement in collection. One is the increase in card payments driven by the pandemic, another is the limitation of cash operations introduced by the anti-fraud law. He has also pointed out the effects induced after the verification of the tax declarations: the growth of the bases in the following years is between 23% and 30%.
In her speech, the director of the Agency has also detailed the agency’s budget for 2023, of some 1,700 million. The bulk of this figure, 1,396 million, comes from a transfer from the Ministry of Finance, to which must be added the credit generation mechanism, a percentage of the collection from acts of the Agency, which for 2023 is 5% (358 million), in line with recent years.
Fernández has underlined that a large part of the body’s budget that is not used to pay staff will be allocated to improving computer tools and has emphasized that all actions, whether assistance or control, are aimed at expanding of the tax bases and the improvement of voluntary compliance. He has assured, on the other hand, that work is being done to resolve the internal conflict with the union organizations, to which he has asked for “time”, for the breaches of the commitments regarding the development of the professional and administrative career of the staff. .