The Budget Plan for 2021 considers revenues of 40.3% of GDP against 41.7% in 2020. The government estimates an increase in absolute terms of 33.44 billion euros (+7.3% per year), although the ratio falls due to the greater increase in GDP. On the side of public revenues, the rise is explained by the increase in activity and by fiscal measures. The Google and Tobin Taxes are foreseen, as well as taxes on single-use plastic containers or the hike in VAT on sugared and sweetened beverages from 10% to 21%, and also measures against tax fraud. Overall, Spain plans to raise taxes for an amount of 6.84 billion euros.
The proposal is based on a non-financial spending limit, known as the ‘spending ceiling’, of 196.09 billion euros, 53.7% higher than that approved in February, and which includes extraordinary transfers to the Autonomous Regions (13.48 billion euros) and Social Security (18.39 billion euros) and part of the European funds (27.436 billion euros).
It also includes the new macroeconomic framework of the Government, which forecasts a fall in GDP of 11.2% this year, with an unemployment rate of 17.1%, and a growth of 7.2% in 2021. This figure could reach 9.8% if European funds are taken into account, while unemployment could drop to 16.9%.
As for the public deficit, the Budget draft estimates that it will climb to 11.3% of GDP this year as a result of the crisis and the greater spending to alleviate the consequences. The deficit reference rate is fixed at 7.7% in 2021, while public debt is expected to rise to 118% of GDP this year.