Pandemic and ‘Hope’ cut tax revenues by 224m euros in January

By Tasos Dasopoulos

Restrictive measures to curb the spread of the Omicron mutation and deferrals of tax liabilities and bad weather “Hope” led to a 224m-euro shortfall in tax revenue in January.

The revenue shortfall combined with a larger deficit of € 1,654 million in expenditure led to a marginal primary surplus of € 17 million for the first month of 2022 against a target for a primary deficit of € 1,145 million.

Respectively, the budget deficit amounted to € 1,196 million, compared to a deficit target of € 2,243 million.

Commenting on the execution of the budget for January, the Deputy Minister of Finance, Mr. Theodoros Skylakakis, attributed the revenue shortfall to the continuation of the pandemic and the bad weather, emphasizing: “Despite the postponement of VAT and other taxes for February 4, close to the target (-224 million euros) and would exceed it by about 100 million euros, based on the estimates of the General Accountant, if there was no such suspension “.

He added that “January, due to the outbreak of the” O “mutation and the weather, was a difficult economic month, which had (temporary) effects on economic activity, which have already begun to take off, based on the first data. from electronic transactions. “The course of the economy – unless there are significant negative international developments – is expected to improve in the coming months.”

More specifically, according to the GLC, the amount of net revenues of the state budget amounted to 3,857 million euros, showing a decrease of 608 million euros or 13.6% compared to the estimate for the corresponding period included in the budget report 2022. This decrease is mainly due to the reduced revenues from Taxes, as well as from the PDE.

Total state budget revenues amounted to 4,089 million euros, down 661 million euros or 13.9% from the target.

Tax revenue amounted to € 3,888 million, down € 224 million or 5.5% from the target set in the 2022 Budget Report. This reduction is due to the extension, until 4 February, of the deadline payment of tax liabilities in the areas affected by the snowfall, which had a deadline of 31 January. With the exception of this extension and based on the available revenue data until 4 February, it is estimated that the tax revenue for January exceeded the target by approximately EUR 100 million.

Revenue recoveries amounted to EUR 232 million, down by EUR 54 million against the target (EUR 285 million).

Public Investment Budget (PIP) revenues amounted to € 67 million, down € 358 million from the target (€ 425 million).

The costs

The State Budget expenditures for the period January 2022 amounted to 5,054 million euros and are reduced by 1,654 million euros compared to the target (6,708 million euros), which is included in the presentation report of the 2022 Budget.

On the part of the Regular Budget, there is a lag of 1.916 million euros against the target, which is mainly due to the delay in the payments of the armament programs.

Payments on investment expenditure amounted to € 732 million, an increase of € 262 million compared to the € 470 million target.

The provisional picture of the main payments of the pandemic measures for the period January is as follows:

(a) the support of small and micro-enterprises affected by COVID-19 in the Regions, amounting to EUR 114 million, from the EDP;
b) the contribution of the State for the repayment of business loans of affected borrowers, amounting to 25 million euros, from the EDP; and
c) the working capital subsidy to tourism enterprises, amounting to 42 million euros, from the PDE.

The state budget expenditures for the period January 2022 are reduced, compared to the corresponding period of 2021, by 355 million euros.