Tax takings strengthen public revenues

State earnings mainly from value-added tax but also from income tax have led to an increase in public revenues between January and September. 

In relation to the goal that had been set, the collection surplus exceeds 4.8 billion euros, a development that will highly likely continue until the end of the year.

According to the detailed data published on Tuesday by the State General Accounting Office, VAT has bolstered the budget with an additional €190 million each month above the target, so that €1.7 billion more has been collected since the beginning of the year. Inflation – and especially higher fuel prices – have been instrumental in increasing revenues from this source and it is estimated that by the end of the year the extra amount from VAT will be around €2.3 billion.

The contribution of income tax has also been significant, with businesses and individuals having paid an additional €1.5 billion compared to the budget target.

The increase in revenues combined with the contraction in expenditure led to the creation of a primary surplus of €52 million against a target for a primary deficit of 5.943 billion euros.

Tax revenues amounted to €40.56 billion in the first nine months of the year, €4.82 billion or 13.5% higher than the target included in the report accompanying the 2022 budget (total state budget revenues amounted to 48.364 billion euros).

That overperformance was thanks to increased VAT revenue, which amounted to €15.6 billion and has beaten its target by €1.70 million; the increased takings from property taxation, which amounted to €2.24 billion and is €643 million above the budget target; the higher income tax collection, which amounted to €12.5 billion to beat the target by €1.51 billion.

At the same time revenue refunds amounted to €4.34 billion, €917 million above the target.

State budget spending for the January-September 2022 period amounted to €48.245 billion and was €641 million lower than the target. This development is mainly thanks to the postponement of the payments for defense procurement programs by €656 million.

Payments for collateral forfeitures were also down by €456 million.