Madrid and Barcelona were the two provincial capitals that collected the most local taxes per capita in 2023, with a figure close to 1,000 euros per capita for these taxes, according to a study prepared by the Register of Tax Advisors Economists on the prospects for local taxation in 2024.
The text, prepared by the tax specialist body of the General Council of Economists of Spain, analyses the taxes and rates with which local companies are financed, the tax power of municipalities, the use made of the province’s capital and its collection efficiency.
In this context, this body notes the “significant” differences that citizens pay for local taxes, because even if In Madrid they pay 1,001 euros per inhabitant, in Pamplona they pay only 435 euros.a difference of 566 euros between the city where you pay the most and the one where you pay the least.
After Madrid, which is at the top of the provincial capitals where local taxes are paid the most, there are three Catalan cities: Barcelona (978 euros per inhabitant); Tarragona (917 euros per inhabitant) and Girona (901 euros per inhabitant).
Next come Toledo, with 874 euros per inhabitant collected in local taxes, Soria (864 euros per inhabitant); Lleida (862 euros per inhabitant) and Segovia (843 euros per inhabitant). On the other hand, Pamplona (435 euros per inhabitant), Jaén (492 euros per inhabitant) and Badajoz (508 euros per inhabitant) are the provincial capitals in which the least local taxes are paid.
IBI is the most numerous tax
The publication of the Register of Tax Consulting Economists confirms that Town halls derive 66% of their income from local taxes via the Real Estate Tax (IBI)a compulsory tax over which they have significant regulatory capacity and which is collected each year.
Of the two other taxes with compulsory levy and also with annual collection, the Tax on Economic Activities (IAE) has little participation, the 8% of the total municipal income, the collection of which is subject to exemptions.
For his part, the Tax on Mechanically Traction Vehicles (IVTM) It has the particularity of being paid by the holder of the driving license, which is why some municipalities have attracted fleets of vehicles by setting very low rates. The collection comes from 11% of local income.
He Tax on Construction, Installations and Works (ICIO)which is optional, has some problems with the quantification and revision of its tax base. In the past, during the real estate boom, it contributed heavily to municipal revenues. Currently, its contribution to municipal coffers has been considerably reduced, contributing only with the 7% of local income.
He Urban Land Value Addition Tax (IIVTNU)optional and commonly called municipal capital gains, has been strongly questioned in recent times, after the declaration of unconstitutionality of certain precepts of the tax and which was finally modified, leading to important regulatory differences made in 2021 and which differentiate the current situation. This tribute offers the 8% of municipal revenues.
As for municipal taxes, with which 28.6% of all tax revenues of the Local Treasuries are collected, it is observed that many tax the same services or the same use of the domain, although the form of doing so is very different for each one.
Similarly, the tax experts of the General Council of Economists have highlighted the problem that only some municipalities have economic-administrative bodies. Taxpayers in municipalities without these bodies must resort directly to the contentious-administrative route if they do not agree with a local tax settlement, since they cannot access the free economic-administrative route in advance, which often leads to not pleading for the costs involved in the judicial process.
