5. Special Taxes

Tax revenue from Special Taxes (II.EE.) grew by 1.1 compared to 2017 reaching 20,528 million. The taxes on hydrocarbons (3%), electricity (3.5%) and beer (1.8%) increased. The rest saw their income fall, with the most notable, due to the intensity of the fall, being the Tax on Coal (-13.1%) and, due to its importance within the group, the Tax on Tobacco Products (-1.4%).

The consumption of products subject to II.EE. grew in all figures (Table 5.1). In the Hydrocarbon Tax, gasoline and diesel, which are the main products subject to tax, grew by 2.4%, slightly above the increase in 2017 (2.1%), thanks to the rise in subsidized diesel. In the Tobacco Tax, the growth (1.6%) contrasts with the sharp fall in 2017 (-6.6%), although this was exclusively a consequence of the hoarding episode that occurred in December 2016 after the last rate increase. The same can be said of consumption in the Tax on Alcohol and Derived Beverages (1.4% in 2018 compared to -5.2% in 2017). In the Electricity Tax, the increase in consumption (1.9%) also had an exceptional component due to the existence of a month in 2017 with a lower than usual billing. Finally, the increase in consumption of the Beer Tax is estimated at 2.3%, a rate lower than the average of around 3.5% of the last four years.

In terms of prices, energy products grew at a similar rate to that of 2017, very high in the case of hydrocarbons (9.2%, Table 9.1) and more moderate (2.2%, Table 5.6) in the case of electricity. In both cases, the increases were concentrated in the second half of the year. In the rest of the figures the increases were around 1% (Tables 5.2, 5.3 and 9.2). The relative stability of price increases and the rise in consumption meant that spending on products subject to II.EE. will go from growing 4.7% in 2017 to 6.8% in 2018 (Table 1.3).

In 2018, the legal rates remained unchanged, except for some hydrocarbons of little quantitative importance in the tax as a whole. These are natural gas, diesel and fuel oil used in the generation of electricity, which became exempt following the entry into force of Royal Decree-Law 15/2018, on urgent measures for the energy transition and consumer protection. The effective rates did have some variation (Table 5.1), in Hydrocarbons and Beer as a consequence of the different growth of the different subject products, and in Electricity and Tobacco Products fundamentally due to price increases.

The II.EE. accrued grew by 1.9% in 2018, above the 0.2% in 2017 (Table 5.1). Given the virtual stability of rates, the improvement is explained by the rise in consumption, largely due to the recovery in alcohol and tobacco consumption after the negative performance they had in 2017. All figures increased, except for the Tax on Intermediate Products, which was almost symbolic, and the Tax on Coal, which registered a sharp decrease when compared to the high level of income in 2017, as a result of the use of coal as a substitute for hydroelectric power in that year of drought.

In 2018, the accrued Hydrocarbon Tax grew by 1.8%, less than in 2017 (2.6%; Table 5.4). The main reason for the slower growth was the decline in natural gas consumption, mainly due to its lower use in the production of electricity. Added to this fact is the elimination, at the end of the year, of the tax on natural gas, diesel and fuel oil used in the generation of electricity, introduced, as stated, by Royal Decree-Law 15/2018. In the most consumed products, gasoline and diesel, growth in 2018 was slightly higher than in 2017 (2.4% and 2.1%, respectively). The improvement was due to the increase in the consumption of subsidised diesel fuels, closely linked to the weather situation. However, consumption of gasoline and diesel, which is more closely linked to the economic situation, showed more moderate growth than in 2017. The novelty in 2018 was the loss of weight of the latter in the consumption of gasoline and automotive diesel. The share of automotive diesel fuel in the total amount of gasoline and automotive diesel fuel rose from just over 50% in 1995 to a peak of 81.3% in 2016-2017; In 2018, that percentage fell by around half a point for the first time since 1995.

The Tobacco Tax increased by 2.4% in 2018, compared to the fall (-4.8%) in 2017 (Table 5.5). The change, as explained, was due to anomalies in consumer output at the end of 2016 that distorted the normal behaviour of the series. Looking at the evolution of consumption and taxes from a perspective, it can be seen that both have practically stabilized since 2013, the former with 2.1 billion packs and 39.5 million kilos per year, and the latter with 6.6 billion euros. If anything, in the last two years we would see results slightly below the minimum that consumption and taxes seem to have reached. The weak price growth, coupled with the downward trend since 2014 for non-cigarette products, has reinforced the above-mentioned development.

The accrued Electricity Tax grew almost 3.5 points more than in 2017 (Table 5.6). Almost two points come from consumption growth, zero in 2017 and close to 2% in 2018. This growth, however, is more related to the irregularities that occurred in May 2017 in the billing of some companies than to a genuine improvement in consumption. The remainder of the higher growth in 2018 came from the behaviour of the effective rate on the tax base, which, unlike in 2017, rose slightly. It should be noted that, although the legal rates have remained unchanged since this tax was introduced, the effective rates may vary for two reasons: variations that occur in reductions to large consumers and other electricity-intensive sectors, and changes in prices. In this case, prices played no role in the rise in the tax because, despite the increases observed in the second half of the year, the increase for the year as a whole was slightly lower than in 2017.

As regards alcohol-related taxes, the Tax on Alcohol and Derived Beverages recovered (1.4%) after the fall in 2017 caused by the hoarding episode at the end of 2016. (Table 5.2). For its part, the Beer Tax grew (3.1%) at a slower rate than in 2017 (Table 5.3) due to the moderation shown by consumption, while the effective rate rose again, indicative, given the stability of the rates, of a shift in consumption towards varieties with a higher alcohol content.

Finally, the accrued Coal Tax decreased by 15.1%. The main reason was the high level of the tax in 2017 at the height of the drought. However, the tax accrued in 2018 was close to the average for the 2014-2017 period (275 million annually).

In 2018 tax revenues from special taxes reached 20,528 million, 1.1 more than in 2017. The small differences with the accrual, concentrated in tobacco and alcohol, are still the result of the shift to 2017 of the high income accrued in the last months of 2016, following the latest rate increases.