Authorities in Malaga collect additional 20% in income tax and 10% more in IVA this year

It is a sign of economic prosperity, job creation, strong consumer spending and positive business results: tax revenues continue to rise across Spain and at an even faster rate. Revenue for the Treasury is already expected to reach a new all-time high at national level. Meanwhile, in Malaga it will be the fifth consecutive year of record contributions to the state coffers. The data up to September, published last Friday by María Jesús Montero's Ministry, suggests this likelihood. Between January and September, the taxpayers of Malaga paid a total of 4.38 billion euros to the tax authorities (Hacienda), a figure 16.2% higher than in the same period last year. For the entire year of 2024, revenue in this province was just over 5.5 billion euros. In Spain as a whole, economic growth is somewhat more modest, at 10.1%, reaching 225.74 billion euros. In 2024 as a whole, revenue for the whole country was close to 295 billion euros.

Malaga's figures place it as the seventh province in terms of contributions to the state's public coffers and sixth in terms of population size. It follows behind Madrid (101.6 billion euros), Barcelona (37.2 billion), Valencia (over 11.2 billion euros), Seville (6 billion), the Balearic Islands (5.24 billions) and Alicante (4.65 billions). Malaga ranks ahead of A Coruña, which has a large multinational, Inditex, as a major contributor.

Turning to the ranking by region in Spain, Andalucía is fourth in terms of the volume of state taxes paid, with 16.45 billion euros collected up to September (11.7% more than in the first nine months of last year). Madrid, Catalonia and Valencia are again ahead.

Coming back to Malaga, the tax that generates most revenue for state coffers is personal income tax (IRPF) and Malaga's taxpayers have already paid 1.93 billion euros in this tax, 19.3% more than at the same time last year. Across all of Spain, revenue from this tax has risen somewhat more modestly, by 10.2%, to approximately 105 billion euros.

In Malaga province, the most significant tax contribution comes from income earned, which accounts for more than 1.32 billion of the 2.35 billion euros in gross income tax revenue. However, the tax collection report prepared by Treasury officials states that September's revenue at the national level fell slightly short of expectations due to the slower salary increases observed in the private sector as the year progresses and the lack of adjustments to public sector salaries. We are also witnessing lower revenue from capital gains tax, especially from bank accounts and deposits, whose returns have fallen in line with the decline in interest rates.

Among direct taxes - those levied on income and profits - corporate income tax generated 616 million euros in revenue in the province between January and September, 10.4% more than the previous year. This tax stands out especially in the national context, as revenues across Spain remained virtually flat, barely up 0.7%, although enough to surpass the 15 billion euros mark.

Completing the list of direct taxes is non-resident income tax, whose revenue grew by 36% in Malaga, reaching 200 million euros.

We now turn to indirect taxes, those levied on general consumer spending or on specific goods. Of these, the most significant tax is IVA, which generated revenue in Malaga province of 14.85 billion euros, 10.7% more than the previous year. Here, too, Malaga outperformed the growth experienced in Spain as a whole, which was limited to 9.1%, reaching 75.09 billion euros. Experts typically argue that IVA revenue grows faster in the Costa del Sol province than elsewhere due to the importance of tourism and the presence of a transient population. Across Spain, the increase is also due to the return to normal rates on energy goods and food products, which central government had previously lowered in response to the inflationary crisis caused by Russia's invasion of Ukraine.

Meanwhile, revenue from excise duty - the tax levied on alcohol, tobacco and energy products - reached 20 million euros in the province between January and September, representing a year-on-year increase of almost 36%, compared to a 5.4% increase for Spain as a whole. Lastly, the tax on foreign trade generated 14.47 million euros in Malaga, a year-on-year increase of almost 20%.