Despite the significant lag in public revenues, the state budget produced a primary surplus of 1.54 billion euros in the first quarter of the year, according to figures released on Tuesday by the Finance Ministry.
State revenues missed their target by 728 million euros in the year to end-March, mainly due to the poor performance of indirect tax takings (both in transactions and in consumption), as well as to increased tax rebates implemented in this period. The surplus reached this level thanks to the containment of expenditure by 505 million euros compared with the budget target, and to the markedly increased revenue flow from the European Commission for the Public Investments Program.
Net revenues amounted to 10.68 billion euros, missing their target by 6.4 percent in the first three months of the year. This is mostly attributed to the lagging by 189 million, or 87.5 percent, from income tax collection due to the postponement of a payment deadline until today for the tax normally due in January, and to the shortfall of 288 million euros from value-added tax revenues from fuel.
In contrast, the result of luxury tax collection bettered expectations by 173 million euros, or 48.1 percent, and VAT from other products brought in 125 million euros or 4.8 percent more than anticipated. Other indirect taxes also fetched 18 million euros more, or 29.4 percent.
State budget spending amounted to 13.16 billion euros in the January-March period, mainly thanks to the reduction in primary expenditure by 696 million euros compared with the target. Public Investments Program spending came to 918 million euros, i.e. 318 million euros above target, and 439 million euros more than in the same period last year.