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The state's tax revenues have fallen sharply

Tax revenues contracted by nearly 10% year-on-year in January-October, to RON 116.6 billion (EUR 23.9 bln), according to Economica.net quoting data from the tax collection agency ANAF.

 

The Finance Ministry will announce the budget execution for the first ten months of the year later this week.

 

The data published by ANAF indicate a significant 33% plunge in tax revenues in October, to RON 11.6 bln (EUR 2.38 bln).

 

While the drop might seem impressive, a direct year-on-year comparison might not be entirely relevant this year, especially for short periods (one month).

 

Furthermore, the tax revenues account for only half of the total budget revenues (47.2%, in January- September), while other significant sources of revenues to the general government budget are the social security contributions (some 36% of the total revenues, in January - September).

 

The tax revenues naturally contracted this year (down 5.6% in the first nine months), mostly as the companies were allowed to defer their dues to budget.

 

Meanwhile, the social security contributions performed much better and remained steady in the first three quarters of the year compared to the same period in 2019.

The transfers from the European Union's budget are the third major source of financing for the general government budget.

 

They increased robustly by 37% yoy in January-September - but the increase accounted for only 0.4% of GDP compared to a public deficit of 6.4% of GDP - nearly 4% of GDP more than in the same period last year.

 

Specifically, the transfers from the EU budget in January - September rose to 1.4% of the year's projected GDP, out of total budget revenues of 21.5% of the year's GDP.

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