This year’s tax revenues may even climb above 47 billion euros, with Finance Ministry officials about to upwardly revise their target.
Hundreds of thousands of private sector workers will start paying tax deductions as of May 1 after the 7.5% hike to the minimum wage. Workers and enterprises will face higher tax dues this year as in 2021 the nominal incomes posted an increase compared to 2020, when there were long lockdowns, company shutterings and furloughs. Furthermore, all taxpayers as well as tourists will face higher value-added dues that what the budget had projected due to the very high inflation seen topping 5% for 2022.
There is only one source of revenues set to lag estimates, and that is the special consumption taxes: They are levies that depend exclusively on consumption, which is in decline due to the soaring of prices. Already in April the ministry has recorded a decline in the consumption tax on fuel, to be reflected on the budget data for the year’s first four months.
The budget deficit will be higher than originally projected, but this will be because of the increased expenditure and not any revenue shortfall.