Booming labour market boosts tax revenues (September 2017)

The continued expansion in the labour market along with the growth in social and health contribution revenues constitute the main factors of revisions vis-à-vis the last tax revenue forecast. Compared to the June 2017 projections round, the tax revenues have been revised up by EUR 147 to 211 million (0.1 to 0.2 per cent of GDP) between 2017 and 2020, respectively. Compared to the General Government budget for 2017 to 2019, however, the revision is marginal (EUR 8 to 25 million respectively). The 2016 upturn in the tax revenue forecast is fully attributable to corporate income tax, reflecting better-than-expected tax settlements by the largest corporations. In the meantime, the effective value-added tax rate increased above 15 per cent during the second quarter of 2017.