High increase in tax collections suggests that Spain is recovering quicker from Covid than expected

THE COVID pandemic and associated lockdowns suffered throughout have had a devastating effect on all industries in Spain.

In the aftermath, however, voluntary tax payments of all types have increased beyond all expectations.

Experts have suggested this shows that the country’s economy is recovering much faster than originally anticipated.

For example, 2021 tax collections in Alicante province not only increased from 2020, but they have exceeded pre-crisis figures.

Euros Money

By the end of November 2021, Alicante’s Tax Agency had collected almost 3.6 million euros, some 10.9% more than in 2020.

That figure is also over 4% higher than 2019, when the pandemic first broke.


Local provincial tax collection has also increased year on year, by over 5 million euros in Alicante province alone.

Nationwide, Spain’s treasury collected almost 15% more than in 2020, and more than 4% more than 2019.

With GDP estimated at between 4.5 & 6.5% in 2021, this reveals a considerable gap between the increase in tax collection and perceived growth.

With more than €478m collected, this income benefits all 139 municipalities of Alicante.

Income Tax

Finance expert, José María Mollinedo, admitted: “When there is a recovery, tax revenues normally rise faster than GDP, but not by this margin, which makes some economists think that some have underestimated the economic improvement [of Spain].”

Concerted efforts by authorities to ensure full employment declaration to cover ERTE payments also resulted in higher collections of personal income tax.


Generally, IVA and VAT represents increasing prosperity as it reflects general consumption.

Over 8% more IVA was collected in 2021 throughout Alicante province, compared with 2020.

Moreover, the 1.5 billion euros collected was over 5% more than 2019.

With Costa Blanca’s tourism industry decimated throughout the pandemic, this figure could have been a lot higher, as nationwide figures show almost 15% more IVA collected.

Francisco Menargues, president of the Alicante College of Economists, also suggested that part of the improved tax collections came from the increased prices of raw materials and energy.

He said, “Although the [IVA] rate has fallen, the price of the energy has more than doubled, which means that more [tax] is collected.”

High voluntary payments

Overall, agencies that collect Suma, Real Estate Tax (IBI), vehicle tax and other fees achieved their best results in 2021.

Figures show that a net collection percentage of 92.3% was reached within the voluntary payment period. 

José Antonio Belso, Suma director, pointed to an efficient administration and the fear of penalties from late tax payments.

He admitted, “Being on top of the taxpayer leads to higher collection [and] increases the sensitivity of taxpayers and their tax obligations.”

READ MORE: Foreign tourist numbers in Spain recover by 70% before arrival of Omicron COVID variant

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