State budgetary figures paint mixed picture

Page created: Friday, 26 June 2015 8:59 GMT

Budget Deficit  Interest Rates  Taxes

The Portuguese state clocked up a budgetary deficit totalling €867.5 million in the first five months of this year and thus representing a spending overshoot some €108.2 million worse than 2014 the General Directorate of the Budget reported Thursday.

However, on the positive side, that did also take into account unidentified public entities that were reclassified in 2015 and not included last year with the state running a primary surplus, and hence income minus costs but not including debt servicing charges, totalling €2.142 billion through to the end of May.

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The General Directorate’s report pointed out how the deterioration in the overall deficit position was thus “explained by the behaviour of interest rates given that the primary balance improved by €326.4 million.”

This in turn stems from the state seeing a 4% annualised rise in its tax take over this period with some €15.2 billion flowing into state coffers with indirect taxation putting in a particularly strong performance.

That 4% in practice reflects a €586.9 million increase on the €14.64 billion collected over the first five months of 2014.

While there was little change in the level of revenues returned by direct taxation, up 1.3% at €6.7 billion, indirect taxes rose by 6.3% to amount to €8.6 billion through to May.

In turn, those direct taxation revenues saw personal income tax advance 0.7% to €4.8 billion while corporate taxation chipped in with €1.9 billion, up 0.3% year-on-year.

The strongest percentage climbers came from the transport sector with taxes on car sales surging 25.3% to €233.6 million whilst car circulation duties added an extra 10.5% to reach €118.9 million in the first five months of this year.

In turn, fuel duties saw a 7.8% increase to €903.3 million whilst VAT bubbled up 7.9% over the period to total €6.3 billion through to May.

The General Directorate’s report also noted that extraordinary levies on the banking and energy sectors had generated returns of €24.9 million and €23.9 million respectively.

Kicking this buoyant revenue trend was the tobacco tax that slid 21.2% year-on-year over this period to add €325.2 million to the state’s coffers against the €412.8 million brought in last year.