UTAO says that tax revenue is “almost” stagnant – publico

 
         

                 

                         
                     

                         

                 

 
 

Economists unit that provides support to Parliament on public finances underline, in analyzing the budget implementation of the first three months of the year, two factors that are influencing positively and negatively the evolution of public finances January to March.

on the one hand, the expense is to have a level of performance below expectations, on the revenue side, the value of the collection in the general government universe is practically the same level as the first three months of last year, below the targets of the Government for the whole year. The Technical Unit of Budget Support (UTAO) proviso, however, that the known data is only three months , so “its interpretation requires particular caution.”

“tax revenue was virtually unchanged” over the first quarter of 2015, falling 0.2%, which contrasts with the growth forecast of 3.1% expected for the entire year. The government estimates that the collection indirect taxes go up 7.1% and the amount raised from direct taxes (personal and corporate income) down 1.1%.

UTAO recognizes that the amount of revenue is influenced the increase in repayments (especially VAT), because at the beginning of last year the amount paid to the company was “abnormally low” because of the entry into force of the new rules for granting these refunds, as the Directorate General of Budget in the synthesis budget execution released last week, and that UTAO now analyzes. So, looking for revenue gross of refunds, the amount raised from indirect taxes (5208 million) increased by 5%.

But this effect harms numbers this year, the opposite happens in taxes, with the revenue to be influenced by “delayed effects” which are reflected positively. This is the case of “early distribution of dividends at the end of 2015, for reasons that are held with uncertainty as to the taxation of IRC, and the effect on public accounting became effective in early 2016.”

Another factor has to do with the “anticipation of tobacco customs clearance at the beginning of 2016 by the tobacco companies, estimated at 200 million revenue increase, in order to avoid increased taxation” which comes into force on 1 July. In the first three months of the year the tobacco revenue increased 27.8%, exceeding 268.5 million euros, with the government to point to a rise of 22% in the 12 months of the year.

The range says UTAO, it is largely determined by the fact that last year did not happen that anticipation by the tobacco companies (and that in 2016 “should be double check”: now, before the tax increase, and at the end of year, as usually happens).

Since the expenditure side, it is found “in compensation”, the actual spending (which grew by 0.6%) had a “degree of execution less than in the same period last year. “

As the budget only came into force on March 31, the first quarter data are conditioned by the regime in twelfths. Nevertheless, there are steps that have been approved independently and are already in force since 1 January, as is the case of reduction of cutting wages in the public service.