Budget: Strong primary surplus January – February with boost from tax revenue

Positively started the year for the Greek economy as the revenues of January-February expanded the primary over the goals of the 2024 exhibition. The tax revenues that exceeded the target by almost EUR 900 million, although slightly lower than the provisional data, mainly due to the collection of the income tax payments, but also revenue from public investment, stand out for their performance. In detail, according to the provisional figures for the implementation of the State budget, on an amended cash basis, announced by the Ministry of Finance for the period January – February 2024, there is a surplus in the balance of the State budget of EUR 1,437 billion compared with a target for a surplus of EUR 101 million included for the corresponding period of 2024 in the Budget 2024 and an surplus of EUR 2,308 billion in the corresponding period of 2023. The primary result on an amended cash basis was a surplus of EUR 3,378 billion, against a target for a primary surplus of EUR 1,981 billion and a primary surplus of EUR 4,215 billion for the same period in 2023. It is noted that most of the difference between the primary surplus and the target in cash terms is not measured in the primary result of 2024 in budgetary terms. For example, an amount of EUR 159 million relating to revenues from the Recovery and Durability Fund, which were collected in a heterochronous manner, does not affect the result in budgetary terms, while a significant part of the difference in net revenue from tax revenue of EUR 647 million is counted against the financial result of the year 2023. An additional amount of EUR 301 million relates to a heterochronisation of transfer payments expected to take place in the coming months. Therefore the primary result in budgetary terms differs significantly from the result in cash terms. Moreover, it is noted that the above concern the primary effect of the Central Administration rather than the whole of the General Government, which includes the financial results of the Legal Persons and Subsectors of OTA and OCA. How state funds were filled In January – February 2024, the net revenue of the state budget amounted to EUR 12,648 billion, showing an increase of EUR 1,570 billion or 14.2% compared to the target set for the corresponding period in the Budget 2024 report. This increase is mainly due to: (a) the increased tax revenue by EUR 423 million following the deduction of refunds; (b) the increased PIP revenue by EUR 751 million; and (c) the collection of EUR 159 million from the Recovery and Durability Fund which was planned to be collected in March 2024. The total revenue of the state budget amounted to EUR 13,856 billion, increased by EUR 2,005 billion or 16.9% over the target. More specifically, the revenue of the major categories of the state budget is as follows: Tax revenues amounted to 11,309 billion euros, increased by 858 million euros or 8.2% compared to the target included in the budget report 2024. This overexecution is estimated to derive mainly from the best return on the income taxes of natural and legal persons of the previous year collected in instalments up to the end of February 2024, as well as the best return on the collection of taxes of this year (VAT, VAT etc.). In particular, the following are noted for the main taxes in this category: VAT revenue amounted to EUR 4.443 billion and is increased against the target by EUR 127 million. The revenue of the EICs amounted to EUR 1,023 billion and is increased against the target by EUR 40 million. The proceeds of property taxes amounted to 217m euros and are reduced against the target by 3m euros. Income tax revenues amounted to EUR 4,065 billion and are increased against the target by EUR 571 million, of which Natural Persons Income Tax is increased by EUR 136 million and Legal Persons Income Tax increased by EUR 397 million against the target. 1. Revenue from the category « Social Contributions » amounted to EUR 10 million , according to the objective . 2. The proceeds of the ‘Transmissions’ category amounted to EUR 1,651 billion , increased by EUR 763 million compared to the objective included in the Budget 2024 report. A sum of EUR 159 million was collected from the Recovery and Durability Fund (TAA), while an amount of EUR 1,430 million relates to PIP revenue, which is increased by EUR 585 million compared to the objective. 3. The proceeds of the sales of goods and services category amounted to EUR 165 million , increased by EUR 18 million compared with the objective included in the Budget 2024 report. 4. Revenue in the ‘Other current revenue’ category amounted to EUR 706 million , increased by EUR 350 million compared to the objective included in the Budget 2024 report, mainly due to increased revenue from reimbursements, by EUR 245 million, as mentioned above. Of the above amount received of EUR 706 million, EUR 202 million relates to PPS revenue which is increased by EUR 166 million compared to the target. 5. The proceeds of the asset sales category amounted to EUR 15 million , against a zero target . Revenue refunds amounted to EUR 1,208 billion, increased by EUR 435 million from the objective (EUR 773 million). The revenues of the Public Investment Programme (PIP) amounted to 1.632 billion euros, increased by 751m euros from the objective (881m euros). The “Image” in February More specifically and in accordance with the budget implementation statement, revenue per major category of the State budget for February 2024 is as follows: 1. Revenue of the tax category amounted to EUR 5,748 billion , increased by EUR 489 million or 9.3% over the target due to the better return of previous year’s income taxes collected in instalments up to the end of February 2024 and the better return on the collection of taxes this year. In particular, the following are noted for the main taxes in this category: • VAT revenue amounted to EUR 2,020 billion and is increased against the target by EUR 98 million. • The revenue of the EICs amounted to EUR 495 million and is increased against the target by EUR 7 million. • The revenue of property taxes amounted to EUR 103 million and is increased against the target by EUR 2 million. • Income tax revenues amounted to EUR 2,169 billion and are increased against the target by EUR 315 million, of which the Income Tax for Natural Persons is increased by EUR 64 million and the Income Tax for Legal Persons increased by EUR 220 million against the target. 2. The revenue of the category « Social Contributions » amounted to EUR 5 million , according to the objective . 3. The proceeds of the ‘Transmissions’ category amounted to EUR 558 million , increased by EUR 379 million compared to the objective included in the budget report 2024. EUR 505 million relates to PIP revenue, which is increased by EUR 343 million compared to the target. 4. The proceeds of the sales of goods and services category amounted to EUR 50 million , reduced by EUR 27 million compared to the objective included in the Budget 2024 draft report . 5. The revenue of the ‘Other current revenue’ category amounted to EUR 276 million , increased by EUR 108 million compared to the objective included in the budget report 2024. The amount of EUR 23 million relates to PIP revenue, which is increased by EUR 18 million compared to the target. Revenue refunds amounted to 707m euros, increased by 373m euros from the objective (334m euros). The revenue of the Public Investment Budget (PPS) amounted to 528m euros, increased by 361m euros from the objective (167m euros). The expenditure of the State Budget for the period January – February 2024 amounted to EUR 11,211 billion and appears to be increased by EUR 234 million compared to the objective (EUR 10,976 billion), included in the budget report 2024. It is also increased, compared to the corresponding period of 2023, by EUR 553 million, due to increased investment costs by EUR 735 million. On the regular budget side, payments are reduced against the target by EUR 399 million. This development is mainly due to the heterochronisation of transfer payments to CIU by EUR 301 million. Payments on the investment expenditure side amounted to EUR 2,055 billion, presenting an increase of EUR 633 million in relation to the objective, as the objective was exceeded both in the PIP and in the Recovery and Durability Fund.