Greece: Budget derailment in first semester

Greece: Budget derailment in first semester

Budget data show a derailment resulting in a 6.1 billion primary deficit in the first half of 2020. The government’s failed policies led to a nosedive in VAT revenue, which in turn exacerbated the overall decrease in revenue in the first semester, parallelly with the skyrocketing of state budget deficit at more than 9.2 billion euros, which translates to roughly 5% of GDP

According to the state budget execution data, in the first half of the year a state budget deficit of 9.232 million euros was recorded against a target of 2.626 billion euros, while the primary outcome recorded a deficit of 6.101 million euros, compared to a target for a primary surplus of 313 million euros (€ 6.414 million deviation).

Regarding the amount of net revenues of the state budget, it was compressed to 18,996 million euros, 3,903 million euros or 17.0% below the target, while total revenue fell to 21,257 million euros, 3,495 million euros or 14.1 % below target.

The lag in tax revenue

A similar lag (13.3%) was recorded in tax revenues (18,262 million euros, 2,794 million euros or 13.3% below the target).

All revenue categories were lower than the target in the first half of the year:

– VAT on petroleum products by € 257 million (-26.1%),

– VAT on tobacco products by € 15 million (-5.0%),

– VAT on other products and services by € 1,113 million (-15.3%),

-Excise duty on energy products by € 223 million (-10.6%),

– Excise duty on tobacco products by € 49 million (-4.9%),

– Excise duty on other products by € 83 million (-28.8%),

-Taxes in the form of stamp by € 22 million (-21.3%),

-Taxes on financial and capital transactions by € 55 million (-24.6%),

– Vehicle registration taxes by € 50 million (-33.2%),

– Other taxes on specific services by € 149 million (-16.4%),

– Other taxes on goods by € 12 million (-34.0%),

– Taxes and duties on imports by € 27 million (-18.1%),

– Regular real estate taxes by € 80 million (-14.6%),

of which Single Property Tax (ENFIA) by € 72 million (-14.0%),

-Other taxes on production by € 10 million (-1.6%),

-Income tax payable by Individuals by € 439 million (-9.6%),

-Income tax payable by companies by € 38 million (-8.7%),

-Other income taxes by € 45 million euros (-8.3%),

-Capital taxes by € 55 million (-42.8%),

-Other current taxes by € 70 million (-11.1%),

-Transfers by € 239 million (-10.9%),

-Sales of goods and services by € 144 million (-40.3%),

-Sales of fixed assets by € 316 million (-99.4%).

Returns

Revenues amounted to € 2,262 million, up € 408 million from the target. Public Investment Budget revenue was € 1,647 million, missing the target by € 350 million.

In particular, in June net government revenue was € 2,967 million, € 1,191 million below the monthly target, as a result of the June lockdown and a 25% discount on timely debt repayment (VAT and certified taxes). /ibna