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The speed at which state tax revenues were rolling in has slowed down, at least in Malaga. State tax collection in Malaga province grew at a staggering rate of 40% in the first half of this year. The nearly 1.95 billion euros that the inhabitants of the province paid in income tax, corporation tax and IVA between January and June contrasted positively with the nearly 1.4 billion euros of the previous year. One quarter later, September end, Malaga taxpayers had paid out over 3.77 billion euros in taxes, 20.5% more than at the same time last year, according to the tax collection report published last Thursday by Spain's national tax agency (AEAT).
From these figures, in addition to the most obvious one that the rate of growth of what Malaga contributes to the public coffers has slowed off in the latest quarter, several other headlines can be selected. To begin with, despite the slowdown observed in the increase in tax revenue in the province, Malaga is still the province with the second highest increase in tax revenue, behind only Vizcaya (36.6%). Therefore, the tax revenue recorded in Malaga province continues to rise more than in Spain as a whole. Nationally the year-on-year increase is less than 8%, over 205 billion euros. Similarly, tax revenues are also growing faster in Malaga than for the region of Andalucía as a whole where the year-on-year increase is limited to 11.5%, or a little over 14.73 billion euros.
Incidentally, with this volume of revenue helped by Malaga, Andalucía is the third place on the list of regions where most taxes are paid: over 14.73 billion euros between January and September, a figure only surpassed by Madrid (92.65 billion euros) and Catalonia (39.5 billion euros).
Speaking of rankings, Malaga's figures make it the seventh province that contributes the most to Treasury as a whole, behind the aforementioned Madrid, Barcelona (34.500 billion euros), Valencia (9.75bn), Seville (5.59bn), the Balearic Islands (nearly 4.7bn) and La Coruña (nearly 4.04bn). In fact, AEAT collects more in Malaga province than in some entire regions, and they are not only the single-province ones, but also other large regions - for example, Castilla-La Mancha (nearly 3.28 billion euros).
Another important point to note from these figures: in view of the fact that last year Malaga set its third consecutive record in tax revenues, it now seems easy to set a fourth for 2024. At the end of September the province is less than 1 billion euros away from surpassing 2023's record. To be precise, in 2023 as a whole the people of Malaga paid a total of just over 4.68 billion euros in state taxes. At a monthly average of 400 million euros in tax revenue thus far this year, it would be within reach to beat that record.
Personal Income Tax (IRPF) is the tax that the people of Malaga contribute most to the Treasury in 2024: 1.62 billion euros, 9.7% more than this time last year. For Spain as a whole the increase has been more discreet, 7.6%, to exceed 95.2 billion euros. AEAT's number-crunchers attribute this rise to salary and pension increases and also to the increase in withholdings applied to income from movable capital, such as investment funds, bank accounts and dividends. They also add that there has been an improvement in withholdings on housing rentals.
After personal income tax, the second most important tax in terms of revenue in the province is IVA (like VAT in the UK), with 1.34 billion euros up to September, 10.9% more than last year's figure. In Spain as a whole the increase is 7.6%, to 68.84 billion euros. The report from the national tax agency attributes the rise, in part, to the gradual return to normal rates on energy products. Furthermore, it suggests that revenue from this tax may register another upward spike as the staggered return to normal IVA rates applied to basic foods, which had already begun in October, kicks in.
The third most relevant tax figure in Malaga province is corporate tax, the tax that is levied on business profits. This is the one that has registered the greatest growth of all in Malaga. Whereas last year at this time it had collected just over 176 million euros, by the end of September 2024 it had already collected almost 558 million euros. This is due to the fact that, although at the end of September 2023 the gross income from this tax amounted to 633 million euros (hardly different to the 683.8 million euros in 2024), the refunds that the Malaga tax office had to make exceeded 457 million euros, compared to 126 million euros in 2024 to date. In Spain as a whole, more than 14.9 billion euros have been paid in for corporate tax, almost 16% more than between January and September 2023.
The performance of the major taxes, therefore, is very positive, reflecting the lively economic activity in Spain in general and in Malaga province in particular. One can see how dynamic it is in such as the creation of employment, the steady, albeit small, rise in wages, the increase in business profits and the rise in consumption. On the downside, the situation regarding the minor taxes is worse. To begin with, revenue from non-resident income tax fell by 3.2% year-on-year in Malaga, to 147.5 million euros, compared to the 15.5% rise recorded for the whole country, close to 2.9 billion euros. In addition, excise duty tax receipts fell by half in the province to 14.75 million euros, compared to the 5.3% increase for Spain (nearly 16.29 billion euros). In addition, the tax on foreign traffic (better known as customs and excise duty) fell by 6.3% in Malaga to 12 million euros.
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