Public revenue in Spain: Strong momentum meets demographic headwinds
Public revenues
Fecha: noviembre 2025
Desiderio Romero-Jordán
SEFO, Spanish and International Economic & Financial Outlook, V. 14 N.º6 (November 2025)
Spain’s public revenue continues to post robust gains, with 2024 marking another year of exceptional tax and social security receipts. Growth in 2025 remains dynamic, driven by employment, wages, and corporate profitability, although underpinned by thefiscal drag effect rather than structural reform. Despite these tailwinds, the persistence of a “stopgap” fiscal strategy has delayed the long-recommended shift toward higher indirect and environmental taxation. Looking ahead, demographic forces are becoming an increasingly important constraint: population ageing is changing the composition of taxable income and eroding personal income tax buoyancy. Immigration has cushioned the decline but cannot fully offset it. Indeed, Spain would need at least one immigrant worker for every new pensioner in order to prop up tax revenue. Moreover, most immigrant workers earn below-average wages and will eventually become pensioners themselves. Without a sustained increase in higher-wage employment or structural tax reform, ageing could weigh heavily on revenue growth and threaten fiscal sustainability in the coming
decades.