ECONOMY

Major slump in 2020 tax revenues

major-slump-in-2020-tax-revenues

Budget data for 2020 showed that the health crisis resulted in a considerable contraction in tax revenues, which missed their target by 7.6 billion euros. The lockdowns, the furloughs and the drop in corporate income tax deposits were the main reasons for the slump in tax takings, which is expected to continue in the first quarter of this year.

Revenues from value-added tax were €3.2 billion below the original estimates, finally settling at €15 billion. A large part of the losses were due to the closure of food service and retail commerce.

Losses from income tax were even greater last year, as they amounted to €3.654 billion, according to provisional figures. Individual taxpayers paid taxes of €9.788 billion, against a target for €11.327 billion – i.e. €1.539 billion less. Companies paid €1.956 billion less than projected.

Notably, 2020 income tax is being paid in eight monthly installments, and in January and February the state will continue to collect revenues from last year. These seventh and eighth tranches are anticipated to bring in €900 million in 2020 tax dues.