State raised more 893 million euros in taxes in April – The Economic Newspaper

The state charged more 893 million euros in taxes in April, an increase of 7.6% compared to the same period of last year. In the four months of the year, tax revenue amounted to 12,662 million euros, mainly explained by the growth in VAT revenue, which resulted in a provision for the State coffers of 5,676 million euros and ISP and IRS, which contributed 174 million and 118 million million euros, respectively.

The General Directorate of the Budget (DGO) revealed on Monday, May 27, that in the first four months of 2019 the net fiscal revenue of the State sub-sector registered an increase of 892.5 million euros (up 7.6%), compared to the same period last year (in March tax revenue had increased by 979 million euros, a growth of 10.3%).

According to the Ministry of Finance, the increase in tax revenue up to April "is justified by the good performance of the economy and by the extension of the tax payment deadline at the end of 2018". In a statement, the ministry led by Mário Centeno points out that "tax revenue grew 7.6%, with VAT revenue increasing 8.8% and IRS 3.2%, despite the reduction in the tax burden associated with several taxes, such as the IRS (by the impact of the reform of the number of steps), VAT (by reducing the rate of various goods and services) and ISP (by reducing the rate applied to gasoline by 3 cents).

On the other hand, DGO points out that the performance of tax revenue "is strongly influenced by the evolution of three main taxes: VAT, ISP and IRS", adding that "negatively the behavior of other indirect taxes is highlighted, albeit with a very residual nominal variation" .

According to the budget execution summary for April, all taxes presented a positive variation compared to the same period last year, with ISP and Tobacco Tax (IT) registering the highest percentage changes from 15.9% and 22.4% to 1,265 million and 484 million euros, respectively. In March, the ISP recorded a growth of 22.2%, while IT revenue had decreased by 0.3%.

Regarding the evolution of ISP and IT, the DGO explains that "although there is a tendency for mitigation, the behavior of ISP and IT is still influenced by the extension to January 2, 2019 of the term of payment of taxes in the finance treasuries, due to the point tolerance granted on December 31, 2018 ". This circumstance, according to the DGO, "impacted on the execution of the months of December 2018 and January 2019 in public accounting, although such an impact will not occur in the calculation of fiscal revenue in national accounting."

The DGO also reveals that direct taxes increased by 3.1%, a reduction compared to March given the start of IRS reimbursements. Indirect taxes increased by 9.9%.

Direct taxes increased to 4,120 million euros, plus 123 million euros compared to the same period last year, mainly due to the increase in IRS revenue which totaled 3,793 million euros at the end of April, plus 3.2% over the same period (plus EUR 118 million). In IRC, revenue increased by 1.6% to 320 million euros.

VAT helps in over 459 million indirect tax revenue

Indirect taxes increased by 9.9%. That is, 769 million euros, mainly due to the favorable behavior of VAT (plus 8.8%), which totaled revenue of 5,676 million euros at the end of April, plus 459 million euros compared to the same period last year .

According to the DGO, the increase in indirect tax revenue was further influenced by the positive performance of ISP's revenue, which at the end of April amounted to 1,265 million euros (plus 174 million) and IT with a revenue of 484 million euros until end of April (plus EUR 89 million).

Already the revenue of the Single Tax of Circulation (IUC) increased 10% (plus 13 million) to 137 million euros. And the Stamp Tax (IS) registered a fears of 561 million euros, plus 5.8% (plus 31 million).

Less 71 million euros in repayments

According to the DGO, in April, cumulative reimbursements related to tax revenue "decreased by 70.7 million euros", highlighting a recovery from the previous month, especially given the performance of VAT refunds, but also pressured by the increase in IRS repayments paid. In the case of VAT, reimbursements decreased by 7.3% (minus 148 million euros), against the 24.4% drop recorded in March (minus 400 million euros). IRS repayments in turn increased by 18.3% to € 756 million (plus € 117 million)

Direct tax refunds amounted to € 848 million (IRS 756 million and IRC 91 million), while indirect tax refunds amounted to € 1,910 million, down 6.9% (down 142 million) from the same period of the year past. In the latter case VAT refunds amounted to € 1,876 million, € 148 million less than the same period last year (minus 7.3%).

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