Overall tax inflow in the first nine months of the year was bigger by 6.2 percent than in the same period in 2018 and by the end of the period 73.5 percent of the sum total budgeted for the full year had been received, the Finance Ministry said on Tuesday.

Of alcohol excise duty 10.7 percent more was paid for September than for September 2018. The amount received in the first nine months of the year was smaller by 2.3 percent than the amount for the same nine months of 2018 primarily due to smaller inflow in the first half of this year. The difference with last year is expected to narrow in the coming months as a result of the cut in the duty that took effect from the beginning of July. 

The sum total of excise duty revenue that flowed into the budget during the nine months increased by 7.1 percent on year. The growth is driven by the tobacco excise duty, of which 11.8 percent more was paid for September than for the same month last year. The growth in the first nine months of the year primarily resulted from a contraction of the black market and a 10 percent rise in the  duty that took effect in January.

Inflow of VAT accelerated in September compared with the same month in 2018, with 7.4 percent more paid into the state budget in VAT during the month than in September 2018. Of fields of activity, the biggest contributors to VAT growth were crop and animal production and the sale of motor vehicles, where receipts grew by 189 percent and 17 percent, respectively.

The biggest reduction in VAT receipts was registered in construction, which is mostly attributable to lower volumes of civil engineering works and sales. VAT income for the nine months increased by 6.1 percent compared to the same period in 2018.

The annual rate of growth in personal income tax receipts was 26.5 percent in September, which can be partly ascribed to wage increases putting people in lower basic exemption brackets as the basic exemption rates remain on last year's level.

Additionally, receipts are boosted by a 7 percent income tax on the dividends of resident natural persons, of which €500,000 euros was received during September. Also the inflow of social tax was supported by rapid wage growth, which slowed down to 8 percent in September.

Employment grew by 1.3 percent in September and remains at an all-time high, resulting in a continued shortage of labor and upward pressure on wages.

The government sector budget ran a surplus of €6 million, equaling 0.02 percent of GDP, at the end of September. The central government position was a deficit of €105 million, caused in part by bigger income tax refunds. 

The position for the full year is expected to improve by year-end as the income earned from the sale of carbon dioxide emissions credits in 2018 will be counted in with a one-year delay. Also, the growth in VAT receipts is expected to be faster than at the end of 2018.  

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