Tax measures falling short of the target

Official data on Monday confirmed a hole of 1.7 billion euros had appeared in the budget over the first eight months of the year, attributed to a shortfall in income tax takings, the postponement by one month of the collection of the Single Property Tax (ENFIA) – from August to September – and low privatization revenues.

Budget revenues were supported by taxes from previous financial years, which raises questions about the efficiency of the new tax measures. Takings include those from the concession of the 14 regional airports, amounting to 296.16 million euros, but sell-off revenues missed their target by 26.3 percent or 346 million euros.

Even revenues from value-added tax are showing fatigue in spite of the increase in the rate by one percentage point and the abolition of special discounts, to say nothing of the increased tourism traffic.

The primary budget surplus missed its target for the first time in 2017, amounting to 3.54 billion euros in the year to end-August, against a target for 3.57 billion. The September data, to be published in early October, will likely be crucial for the success of the 2017 budget.