If taxes are a reliable thermometer of economic activity, Alicante’s story shows steady progress. The region keeps advancing, albeit at a gentler pace. Employment, wage growth, and pension increases continue to attract revenue, while personal income tax remains steady, and VAT, along with regional charges such as the Property Transfer Tax on real estate deals, show more modest gains as growth cools.
In the first quarter, residents of Alicante contributed up to 1,316 million to the central government and the Generalitat for the various taxes they oversee. This marks a 12% rise from the same period in 2022, a notable uptick even as it falls short of last year’s surge.
The shift is especially pronounced in regional taxes. Last year, the Valencia Tax Office registered a strong first quarter, with income in the province rising by at least 30.9% thanks to a buoyant real estate market and higher inheritance activity, though the annual growth settled at 5.4%, totaling 224 million euros.
In the event of data breakdown, the Tax Office notes that real estate transfers remain the Consell’s main income engine in Alicante, with 156 million euros, up 8.9% from the previous year. This is a muted surge compared with the 40% jump seen across all of 2022, and it underscores how real estate activity still drives much of the province’s tax intake.
Taxes in this category are accompanied by less pronounced movements in other areas. Legal actions collected fell by 7% year over year, while penalties for noncompliance remained modest. Inheritance tax, which surged during the pandemic period, eased by 18.3% after a 12.9% year-on-year rise last year, reflecting shifting demographics and post-pandemic mortality trends.
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As to gambling-related revenues, the regional administration observed notable gains in direct betting activities. Casinos saw stakes and winnings rise, while bingo activity grew more modestly. The overall picture for gaming taxes remained favorable, but some components showed slower momentum than a year ago. Slot machine receipts increased moderately as the regime recovered from pandemic restrictions.
Work
Turning to state taxes, the national Tax Administration likewise signals slower growth, even as the labor market remains firm and pensions rise. In Alicante, total state tax collections reached 1,092 million in the first quarter, up 13.9% from the same period last year. That rise is below the 19% expansion registered to close 2022, showing a cooling trend alongside a still-strong economy.
Among the main lines of revenue, personal income tax (IPRF) posted the strongest growth, totaling 451 million euros and rising 16.3%. The Tax Office attributes much of this improvement to higher payrolls and pension adjustments that accompanied rising employment. The province added about 27,000 jobs versus a year earlier, helping lift wages and pensions and push up withholding and other payroll-related revenues.
Non-resident income tax, applied to earnings of foreign nationals with activities or assets in Spain, also grew, rising 15% to 33.7 million euros as visitors and non-residents continued to participate in the local economy.
Generalitat uncovers a 23% increase in tax evasion related to the hot real estate market in Alicante, a sign that the boom has drawn more scrutiny. In the same period, VAT collections rose to 540.7 million euros, up 6.3% from last year, reflecting continued consumption but at a slower pace. A notable 11% drop in VAT on imports points to softer import activity amid weaker job prospects and slower regional production.
Corporate income tax receipts stood at 19.4 million euros, while external tax revenues reached 20.3 million euros, up 5.3%. Special consumption taxes advanced by 9.2 million euros, a gain of about 5.1% as consumer activity recovered gradually.