The overshoot in the primary surplus of the state budget continues throughout the five months of January-May 2024. But in the month of May, for the first time, government consumption revenues “stumbled”…

The Ministry of Finance has released the final budget execution figures. Despite the 2.4 billion euro surplus (primary 3.2 billion instead of the 802 million expected), most of it belongs to the 2023 tax revenues (ENFIA, income taxes, traffic taxes, etc.).

However, VAT and Excise Tax collections, which are current indirect taxes in 2024, suggest that something may change from May onwards:

– Since the beginning of the year, increases in VAT collections have continued “in spurts”, mainly due to high prices. In the five months January-May VAT receipts exceeded targets by 296 million euros or 3%.

– At the same time, however, sales (consumption) also showed resilience and growth, since the Special Consumption Tax, which – regardless of the price level – is imposed on the volume of sales, also showed an increase of 72 million euros in the five-month period, with a 2.7% increase.

– Nevertheless, in the month of May – for the first time – a large increase in VAT receipts was recorded (excess of 81 million euros or +5.8%) but at the same time, the VAT (fixed tax on sales volume) did not show an increase but a decline of 4 million euros against the monthly target, or -0.7%.

However, income tax revenues were also down slightly, by EUR 49 million.