Tax revenue shortfall at €7.5 billion

Tax revenues this year will lag a considerable 7.57 billion euros, based on last year’s budget target, due to the reduction of economic activity as a result of the pandemic and the impact from the measures taken to help the economy.

According to the first draft of the 2021 budget, submitted on Monday in Parliament, the consumption reduction alone has this year led to an estimated drop in takings equal to €4.6 billion – the main problem in this year’s budget execution.

There has been a considerable shortfall in revenues from the income tax of individual taxpayers and corporations, estimated at €2.72 billion or -16.3% from the original budget target, to reach a total of €13.94 billion.

That shortfall breaks down to €1.357 billion from the income tax of individuals and €1.21 billion from the earnings of corporations, as well as another €153 million from other categories.

The reduction of the corporate income tax deposit by 30-100% added another €1.6 billion to the shrinking of revenues, while the suspension of value-added tax payments is projected to set the 2020 budget back by a further €512 million.