Spain tax revenue hits record €101.8bn by April

Spain tax revenue hits record €101.8bn by April

The Agencia Tributaria (Spanish Tax Agency) has once again exceeded its own collection ceiling. By April, non-financial resources reached €101,798 million, up 7.8% compared to the same period in 2025. Of the total, €87,731 million came from taxes, growing by 8.3%. VAT contributed €38,207 million (up 5.8%) while income tax surged 11.6%, reaching €22,639 million. The government celebrates this figure as evidence of economic strength, but data analysis suggests the hidden reality is an increase in covert fiscal pressure.

The trick of not indexing income tax for inflation

The rise in income tax (11.6%) far outpaces employment growth (0.5%). This disproportion is not accidental: by failing to adjust income tax brackets for inflation, workers who received salary increases merely to maintain purchasing power have jumped into higher brackets, paying a larger percentage of their income. This is known as "cold pogre" or a silent tax hike. Calculations show that while nominal wages rose around 4% in collective agreements, tax collection grew by 7.8%, a difference that translates into lost purchasing power for taxpayers.

More revenue, but spending grows faster

Part of the debate centers on whether this record helps reduce the deficit or simply funds runaway public spending. State expenditure has grown by 38% since Pedro Sánchez took office, according to reports, well above accumulated inflation. Increased tax revenue allows the accounts to be cosmetically improved, but public debt continues to grow in absolute terms. Critics warn that when a recession hits, revenues will fall and borrowing will skyrocket, worsening the unsustainability of pensions and other structural costs.

Pension sustainability under scrutiny

Another focus of the analysis is the pension replacement rate, currently at 80%, which forecasts from Banco de España and AIReF predict will drop to 60% by 2045 even in the most optimistic scenario. If projections for new workers are not met, it could plummet to 50%. The system relies on contributions from increasingly lower wages to pay high pensions, an equation that in the long term can only be solved with more taxes or cuts. The discussion on intergenerational burden sharing is now on the table.

With these elements, the tax collection record is a double-edged sword: it indicates nominal economic growth, but also that the state is absorbing an increasing share of citizens' income without translating into better public services. The question remains: how long can the donkey keep carrying loads without eating?

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