If taxes are a thermometer for economic activity, Alicante shows steady progress that continues, though at a measured pace. Employment gains, rising wages, and higher pensions are drawing more revenue through personal income tax, value added tax, and especially regional taxes such as the Property Transfer Tax paid on buying and selling existing homes. The tempo of growth in these regional levies is more modest, reflecting the softer overall economic momentum.
In the first quarter of the year, residents of Alicante remitted up to 1,316 million euros to the central government and the regional Generalitat. This total comes from the various taxes each administration administers and marks a 12% increase over the same period in 2022. It is a clear sign of vitality, even if it does not reach the levels seen in the previous year.
The shift is most pronounced in regional taxes. Last year, Valencia’s Tax Office reported a rise in the province’s income of at least 30.9% in the first three months of 2023, driven by the real estate market and higher inheritance transactions, coupled with a 5.4% uptick overall for a total of 224 million euros. This year’s numbers, while solid, show a different rhythm as the impact of the regional economy evolves.
When data is broken down, income tax, patrimony, and taxes on real estate purchases and sales remain the Consell’s main income sources in Alicante. The total stands at 156 million euros, up 8.9% from a year earlier, underscoring a stronger year versus the 40% rise recorded over all of 2022. This paints a nuanced picture: regional tax receipts are healthy but not expanding as aggressively as last year’s surge.
Tax collections also show shifts in other categories. Legal actions, for instance, are down 7% year over year, contrasting with an 11% rise in the prior period, while inheritance tax demonstrates a mixed trend: after a pandemic-driven spike, receipts from inheritance have fallen by 18.3% compared with a 12.9% year-over-year increase the previous year.
In the same vein, the Travel Bonus and related measures are shaping how households account for travel-related costs in their income statements, prompting closer scrutiny of personal tax outcomes through the year.
Across the board, face-to-face gambling taxes show the lingering effects of social restrictions from the pandemic. In the first quarter, gambling revenues in casinos nearly doubled to 1.7 million, bingo rose 35% to 2.1 million, while the number of slot machines increased, led by a 3.2% rise in activity to 9.7 million units. These shifts reflect changing consumer behavior as social activities rebound and regulation catches up with demand.
Work and State Taxes
On the state front, tax collections mirror a slower pace of growth, even as the labor market remains robust and pensions rise. The state taxation authority reports 1.092 billion euros collected in Alicante in the first quarter, up 13.9% from the same period last year. That pace sits six percentage points below the 19% increase that closed 2022, signaling a cooling after last year’s strong finish.
Among the state taxes, personal income tax (IPRF) remains the strongest performer, contributing 451 million euros in revenue, up 16.3%. The monthly collection report notes that improved payrolls and pension adjustments are the main drivers. A stable rise in employment, with around 27,000 more workers than a year ago, supports higher wages and pension revaluations. Non-Resident Income Tax also grows, rising 15% to 33.7 million euros as earnings from foreign residents in Spain increase.
Generalitat’s data reveal a 23% uptick in tax evasion findings tied to the hot real estate market in Alicante, even as overall VAT collections show a more moderate increase. From January to March, VAT receipts amounted to 540.7 million euros, only a 6.3% rise from last year’s pace. This suggests consumption remains positive but not as buoyant as before, with a notable 11% drop in VAT paid on imports pointing to softer domestic demand and reduced supply from firms in the region.
Corporate taxation shows smaller but steady movements: Corporation Tax receipts reached 19.4 million euros in the period, External Traffic about 20.3 million (up 5.3%), and Special Consumption Taxes at 9.2 million, rising 5.1%.
Overall, the regional and national tax picture in Alicante shows a resilient economy with pockets of cooling growth. The most positive single contributor remains personal income tax, reflecting stronger earnings, while VAT signals cautious consumer sentiment amid a mixed employment landscape. The balance of in-region activity, taxation trends, and government policy continues to shape Alicante’s fiscal health in 2024.
Sources and context are based on quarterly fiscal releases and regional tax office updates, with attribution to the relevant authorities and economic reports published for Alicante. The data reflect the province’s position within the broader national and Valencian frameworks, illustrating how tax receipts respond to changes in wages, employment, real estate activity, and consumption patterns.
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