ECONOMY

Revenue shortfall of 2 bln euros

Budget revenues for 2008 show a 2-billion-euro shortfall, according to data published yesterday by the Finance Ministry. Revenues for the whole of last year grew at an annual rate of 6.8 percent, against a target of 12 percent. Receipts from value-added tax (VAT) were particularly disappointing, reflecting widespread tax evasion and the deep crisis in the market. Many companies and self-employed have not paid their VAT dues in December, resulting in a decline of 8.4 percent compared with 2007. Revenues dropped from 869 million euros in December 2007 to just 796 million euros in December 2008. Overall revenues posted an annual growth rate of 8.5 percent in December, relative to the same month of 2007. The reasons for the decline in revenue include slower economic growth, the fact that the mechanism for the new single property tax proved difficult to operate, the poor response to a tax amnesty and the relatively low performance of revenue collection mechanisms in recent months.