2019 tax receipt exceeds expectations
Total tax revenue grew by 7.7 percent year-over-year to €7.87 billion in 2019, which is 1.3 percent more than forecast. Growth relied on better than planned receipt of labor taxes. Excise duty receipt also exceeded forecasts courtesy of the duty on fuel, while receipt of alcohol duties was weaker than in past years.
Labor taxes were the main locomotive for increased receipt of tax last year, the Ministry of Finance communicated. The social tax budget came to 102.1 percent fulfillment, with the physical person income tax budget hitting 109 percent.
The main reason behind increased revenue was faster than expected growth of salaries, supported by both average salary hikes and strong employment. Data from the Tax and Customs Board puts employment at 60.7 percent in late 2019.
Legal person income tax receipt fell by 1.7 on year in 2019, mainly due to a lower tax rate for regularly distributed profits. Lower receipt was to be expected and the budget was fulfilled to 100.9 percent.
Growth of VAT receipt picked up in December compared to the monthly average of the first half-year, reaching 9 percent. Total VAT receipt came to €2.48 billion, with 97.3 percent of the budget hit. Total VAT receipt grew by 6.5 percent on year.
VAT receipt missing forecasts was mainly due to more modest growth of private consumption and government sector investments. Wholesale and public administration contributed the most to growth of VAT receipt, up 20 and 26 percent respectively compared to the same months in 2018. The growth from public administration stems from national defense procurements. Increased VAT receipt from wholesale was based on sales of cereals and motor fuel.
Excise duty revenue grew by 64.9 percent in December year-over-year, with total excise duty revenue growing 11.5 percent in 2019 on year. The extraordinary growth in December was caused by stockpiling of fuel caused by the January 1, 2020 bioadditive requirement.
Motor fuel excise duties revenue was up 17.6 percent in December compared to the same month in 2018. The budget outturn came to 109.3 percent, which is €59 million more than forecast. Increased revenue was mainly down to fuel sellers stockpiling gasoline and diesel in December.
Receipt of alcohol duties missed the forecast by 2.2 percent or by €5 million in 2019. Excise duty receipt was down 2.7 percent from 2018. Receipt missing the mark was caused by a 25-percent excise duty cut in the middle of 2019.
Tobacco excise duty receipt was up 13.6 percent on year, with revenue outperforming the forecast by some €10 million. The better than expected result is attributed to reduced black market volumes that saw declared quantities grow by 3 percent.
--
Download the ERR News app for Android and iOS now and never miss an update!
Editor: Marcus Turovski
