Tax revenue forecast for 2017 to be 7.9% higher than last year, says State Secretary for the Treasury

In this regard, José Enrique Fernández de Moya stressed that this figure is the result of the "credible and cautious" macroeconomic scenario that accompanies the General State Budget and that foresees significant economic growth, which will also be accompanied by higher inflation than last year. Hence, the aggregate taxable base will post an estimated increase of 5.5%, compared with 4.3% in 2016.

This macroeconomic chart is an extension of the magnificent data posted in 2016, when the GDP growth rate stood at 3.2%. This is almost double that of the Eurozone, at 1.7%.

This forecast economic growth for 2017 will mainly stem from an increase in domestic demand, which continues to grow for the fourth consecutive year and reflects high rates of consumption and economic activity. In turn, this will foster job creation and export growth.

Revenue and deficit

The State Secretary for the Treasury went on to stress that an increase in revenue will be posted under the main tax categories. As regards Personal Income Tax (IRPF), revenue will grow to 78.03 billion euros. This is an increase of 7.7% on 2016 and is due to growth in household incomes, among other things.

Furthermore, growth of 7.3% is forecast for VAT revenue (67.46 billion euros), 4.6% for Special Taxes and 12.6% for Corporate Income Tax.

José Enrique Fernández de Moya insisted that this growth in tax revenue will significantly underpin the ongoing deficit reduction, which will stand at 3.1% of GDP this year and fall to 3% in 2018. This will allow Spain leave the Excessive Deficit Procedure (EDP).

The fight against tax fraud

During his appearance before the Lower House of Parliament, the State Secretary also wished to highlight the efforts made in the fight against tax fraud. In this regard, he underlined the exceptional 2016 results posted by the Spanish Tax Agency, at 14.88 billion euros.

Among these measures to combat tax fraud, he wished to highlight those adopted in order to comply with the BEPS Project of the OECD, such as the regulations to limit financial expenses, the modification of the international fiscal transparency regime and the country-by-country reporting requirement.

He also mentioned forthcoming measures, such as the new rules against tax evasion practices in Corporate Income Tax matters.

Economic growth

Finally, José Enrique Fernández de Moya stressed that the targets for this budget are none other than "to strengthen the Government of Spain's commitment to budget stability, guarantee the financial sustainability of all public authorities and bolster confidence in the stability of the Spanish economy".

Lastly, he said "it will contribute to budget stability, economic growth and job creation".