Major tax revenue overshoot

Tax payments in a lump sum by taxpayers and increased value-added tax revenues are filling state coffers, creating the necessary fiscal space to support households against the impact of the energy crisis.

Tax collection figures presented by Alternate Finance Minister Thodoros Skylakakis on Monday show an overshoot of 799 million euros in June compared to the target set by the government.

“The positive course of public revenues continued in June. Even if the advance collection of some revenue from the Single Property tax [ENFIA] is taken into account, the growth rate of tax revenue compared to the budgeted remains very high, confirming the significant growth dynamics of the economy, despite the extremely adverse international conditions,” he stated.

Tax revenues amounted to €4.117 billion, up by 24.1% against the target, due to the better performance in the collection of taxes this year, as well as the collection of the second installment of the ENFIA which originally was predicted to be collected in October.

Tax rebates to taxpayers and businesses also increased in June, a development demonstrating the momentum of the economy.

Ministry sources say how this new fiscal leeway will be utilized will be decided in the next few weeks, possibly by September, starting with the most pressing needs, which will also depend on how quickly the electricity production mix changes, leading to a reduction in costs for consumers, but also on the course of international developments.

The price of gas is the focus, the same sources say, while the course of oil is linked to whether there will be any international slowdown that will affect demand and therefore global rates, resulting in a different kind of need for support ahead of the winter.

Provisional budget data for January-June showed a primary deficit of €3.43 billion, against a target for a primary deficit of €4.9 billion. Tax revenues amounted to €24.73 billion, up by €3.64 billion or 17.3% compared to the budget target.