VAT revenues increased 7.2 percent in June. Retail trade contributed the most to this growth, first and foremost via an increase in the sales of retail chains.

On year, VAT receipts decreased the most in construction, primarily due to a decrease in the sales of buildings and structures. In the first half of 2019, VAT revenues were up 5.8 percent.

Total excise duty receipts for the first half of the year increased 5.8 percent on year. The inflow of excise duties in June was impacted the most by the imminent alcohol excise duty cut to enter into effect on July 1, which reduced revenues from the corresponding excise duty by 28 percent. Excise declarations fell as retailers sold primarily previously purchased goods and refrained as much as possible from stocking up on more goods still subject to the higher rate.

Average wage growth slowed

Average wages increased at a rate of 8.6 percent during the first months of 2019, but slowed down to 6.2 percent in June. This deceleration was broad-based — in the seven largest sectors employing over 35,000 people, the increase in average wages slowed by over 2 percentage points.

Employment, meanwhile, was up 1.4 percent in June, and has remained at an all-time high — the ratio of employees registered with the MTA to the working-age population reached 60 percent at the end of 2018, around which it has remained throughout the first half of 2019. In contrast, this share stood at near 50 percent in 2011. This increase indicates a continued labor shortage, which in turn puts pressure on wage growth.

By sector, payroll growth in the first half of the year was driven by IT and communication (16.7  percent) and finance and insurance (15.3 percent), and of bigger economic sectors, administration (12.1 percent), healthcare (11.9 percent) and construction (11.9 percent).

Half-year corporate income tax receipts down

Corporate income tax receipts increased 8.8 percent in June as a result of credit institutions' advance corporation tax. Tax receipts for the first half of 2019, however, were down 8.8 percent on year. Inflows, which totaled €46 million in the first half of the year, were impacted by the lower, 14 percent tax rate on regularly distributed profits. Credit institutions also have the right to deduct advance corporation tax paid the previous year from this year's taxes.

The negative impact on tax receipts was offset by a supplementary 7 percent income tax imposed on dividends subject to the 14 percent tax rate paid to shareholders who are resident natural persons. Since the beginning of 2019, receipts of said taxes paid by resident natural persons have totaled €6.7 million.

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