The treasury’s revenue continues to grow even as households face tougher times. Inflation, a force that tightens family budgets, remains a key factor shaping the local economy. In Alicante, the tax office shows a pronounced year‑over‑year spike in revenues through November, driven by stronger employment, higher wages and pensions, and a rebound in business profits.
Public coffers in Alicante reached 4 billion 328 million euros in the first eleven months of 2022, marking a 21 percent rise from the previous year and outpacing the national growth rate by six percentage points. The latest tax office report highlights that Personal Income Tax (IRPF) generated the largest share, at 1 738 million euros, up 25 percent from the prior year.
The surge is closely tied to increased employment. The total workforce in Alicante now sits above 812,000, and payroll withholdings form the bulk of IRPF income. Increases in salaries and pensions also contribute to higher public revenues, a trend reinforced by the ongoing wage growth across the city and province.
Value Added Tax (VAT) also rose, up 15 percent to 1 billion 702 million euros in the same period, reflecting widespread price gains driven by inflation. Although inflation has moderated somewhat recently, its impact remains a clear driver of price levels and consumer spending.
Company benefits
Corporate Tax ranked as the third largest revenue source for the tax office, reaching 587 million euros with a 28 percent increase. This uptick points to stronger corporate profits, even as returns and regulatory changes have posed some headwinds. The overall rise in revenue was supported by these positive company earnings, though offset by adjustments in returns and regulatory overheads.
Antonio Pérez Rovira, chair of the Financial Commission of the Alicante Association of Economists, concurs with the tax office’s assessment and notes that inflation has pushed households to shoulder higher tax burdens. He explains that wage growth, while helping families, also nudges more income into the treasury as salaries rise.
Rovira adds that tax brackets for IRPF have not kept pace with salary increases, blunting the effect of higher wages for workers. He suggests adjusting this tax to offset inflation so wages can rise without eroding purchasing power or reducing contributions to public coffers.
Moreover, the expert points out that the VAT reduction on essential foods announced by the government could lower tax intake if implemented. He warns that visible savings will depend on whether the measure is applied and how quickly supermarkets reflect lower prices for consumers.
Generalitat’s revenue in Alicante also rose, by 22 percent, underscoring Alicante’s role as the leading contributor to the regional government’s finances. Data from the Valencian Tax Office (ATV) show Alicante delivering 1 037 million euros by November, up 35.9 percent, followed by 849 million in Valencia and 209 million in Castellón.
The lead in collections is driven largely by a buoyant real estate market, with the Real Estate Transfer Tax climbing 46 percent in the first nine months. This growth pushed receipts to 708 million euros compared with the same period the year before. Within the same report, Documented Legal Transactions brought in 115 million euros, up 12 percent, while Inheritance Tax rose 14 percent to 87 million. Heritage contributions stood at 52 million, up 23 percent.
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