Tax collections show a new record pace in the province as prices rise
Tax revenues in the province are on track for record highs this year. Higher prices are boosting value added tax income while employment gains and tax on pensions keep rising, accelerating growth that began in mid last year. The numbers point to a sustained surge never seen before.
Until last April, the Tax Office in Alicante reported 1,565 million euros in revenue, a 19.4% increase from the same period in 2021 and about 3% above the 2007 figure, which stands as a high benchmark for tax paid by Alicante residents to the State.
The nationwide fundraising increase exceeded 1.3 percentage points and now stands 18.1% higher than last year.
Looking at the tax mix, value added tax dominates more than half of the region’s total revenue. In the first four months, VAT reached 793 million euros, rising 20.1% and closely tied to price increases across goods in the shopping basket. As Antonio Perez Rovira, chair of the Alicante Economists Association Tax Commission, notes, the VAT on bread and other staples moves in lockstep with rising prices, creating an automatic revenue link.
It is worth noting that the VAT gains could have been even larger if not for temporary electricity bill reductions that kept the effective rate around 10% rather than the standard 21%.
One of the income assistance centers in Alicante serves residents preparing their tax returns, reflecting the region’s active engagement with taxpayers.
Beyond VAT, the rise in Treasury revenues is echoed across tax types. Personal income tax shows an 18% boost, nearly reaching 585 million euros. This increase is driven by more people in employment and by higher payroll withholdings, as well as pension updates aligned with the cost-of-living index that also contribute to PIT receipts.
A third factor, described by Pérez Rovira, is a revival in the real estate market. Although many affected individuals may not realize it, capital gains from property sales are taxed, adding to the Treasury’s gains. The Income Campaign shows that many declarations reflect substantial sums for this reason.
The face-to-face assistance for the Income Campaign now starts with 17 help points in the province
Recent data from the Tax Office indicate a solid uptick in corporate revenues. Corporate income tax is up by 24.3%, reaching 92 million euros, a rise observed nationwide as the business environment improves and companies seek lower returns in a strengthening economy.
Finally, income tax for non-residents climbed by 73% to 36.2 million euros, while duties on imports from non-EU countries increased by 31.8% to 24.5 million euros.
Tax deductions are limited to specific categories, but it is important to note that provincial collections in Alicante are relatively modest because most tax payments flow through central services in Madrid.