Due to significantly better tax revenues than expected, the budget’s primary surplus significantly exceeded the set targets in the first seven months of the year.

The primary surplus – which excludes spending on servicing the country’s debt – stood at EUR 5.683 billion at the end of July, well above the target of EUR 1.655 billion.

Overall, the budget, including debt service, shows a deficit of EUR 121 million, while EUR 3.745 billion was expected.

In July alone, tax revenues, which came mainly from income and corporate taxes rather than indirect taxes, amounted to 7.739 billion euros. This is 1.059 billion euros or 15.7 percent more than originally estimated.

Overall, tax revenues in the seven months of the year amounted to 36.993 billion euros – 2.317 billion euros or 6.7 percent above budget estimates, according to data from the budget implementation bulletin published on Friday.

Finance ministry officials said the extra revenue would not only help meet the targets of the stability program negotiated with the European Union and released in April, but also leave a buffer of 432 million euros for discretionary spending. But the ministry is quick to reject any calls for handouts, as many of them are backed by its own lawmakers. Spending the entire buffer would violate European Commission guidelines to limit spending increases to 2.6% this year. Fiscal rules, which were relaxed in the wake of the pandemic and energy crisis, are being tightened again at a time when global uncertainties persist.

Of the additional tax revenue of EUR 2.317 billion, EUR 647 million comes from the taxation of the previous year, as taxpayers had until February to pay the income tax assessed last year on their 2022 income. Thus, the actual additional tax amount from the taxation of 2023 income is EUR 1.67 billion.

The General Accounting Office is concerned that July’s haul may be a one-off because many people paid their taxes all at once rather than in up to eight installments to take advantage of a 3% rebate.