State expects €95.2 million lower excise revenue for 2018
The Finance Ministry has reduced its estimate of the inflow of execise duty revenue in 2018 by €95.2 million compared with the state budget adopted last year to approximately €1.08 billion, whereas the estimate of total tax revenue inflow was upped by €49.4 million.
The biggest cut was made in the estimate of the inflow of the alcohol excise duty, which was reduced by €46.2 million to €286.5 million. Compared with the sum total actually received under that item last year, inflow is estimated to be bigger by 29.3 percent. The amounts of the tax received in individual years are affected significantly by the stocks accumulated ahead of tax increases, the ministry said in explanatory remarks accompanying its spring economic forecast.
In 2018, accumulation of stocks prior to a rise in the excise duty rate happens twice, whereas the accumulation of stocks for 2017 largely happened in 2016. In addition, also the effect from the excise duty hikes for beer and other kinds of low-alcohol beverages in the summer of 2017, which was relatively small in 2017 as a result of large-scale accumulation of stocks, will be expressed in receipts this year.
Inflow of the fuel excise duty is estimated to total €546 million in 2018, 6 percent less than set out in the budget. The reduction is mainly a result of the accumulation of stocks which happened prior to the duty increase of Jan. 1 this year on a significantly bigger scale than forecast. Where usually stocks of gasoline equaling one month's consumption are accumulated, this time a stock of almost three average months' consumption was built.
The declared amounts of diesel declined by 5.1 percent last year as a result of a reduction in road haulage volumes and more haulers filling up their vehicles in other countries. The declared amounts of diesel are expected to grow by 4.9 percent this year on the back of an overall increase in economic activity.
The estimate concerning the inflow of the excise duty on natural gas was reduced by 3 percent as a result biomass replacing natural gas in energy production.
The estimate of the amount of tobacco excise duty to be received this year was cut by 6.6 percent to 208.8 million euros as the declared amounts are dropping faster than expected now that both the numbers of smokers and the amounts consumed per person are declining.
The forecast of the total intake of tax revenue in 2018 meanwhile was increased by €49.4 million to €7.32 billion largely as a result of an estimated rise by €60.8 million in receipts of the personal income tax to €248 million. The latter first and foremost results from a reduction of the effect of the basic exemption reform by €30 million as people are using the basic exemption to a smaller extent than they are entitled to during the year and will get the balance as a tax refund in 2019.
The estimate of the inflow of social tax was increased by €95 million compared with the budget to €3.04 billion due to bigger receipts in 2017 and a substantial upward revision of the forecasts concerning employment and the average wage in 2018.
VAT receipts, at €2.33 billion, are estimated to be €10 million smaller than originally planned, mainly because of the downward revision of estimated excise duty receipts.
Editor: Dario Cavegn