Record premium income narrows the social security gap to 0.02% of GDP in August
The good performance of tax collection is essential for correcting the imbalances in the public accounts. According to data released Friday from the Ministry of Finance, the combined deficit of the government services closed the first seven months of the year at 24,015 million euros, 1.84% of GDP. This figure represents a decrease of 58.3% compared to the same period of the previous year. If financial aid is included, the government deficit is 1.87% of GDP.
The government deficit alone, in this case until August, was reduced by 57% year-on-year to EUR 23,833 million, 1.82% of GDP, compared to 4.59% in August 2021.
As expected, the good result is due to the increase of more than 32% in non-financial income, which reached 166,620 million euros. A much higher growth rate than the 5% recorded for expenses, to 190,453 million.
Of the total income figure, 131,308 million euros came from tax collection. In other words, tax revenues account for nearly 80% of total resources, with a historic increase of 24% compared to August 2022.
In addition to the recovery in activity over the period, high inflation has played a key role in figures released Friday by the Treasury Department, which this week presented a new fiscal package based on a greater burden on the rich and large. businesses, while easing the weight of personal income tax on the lowest incomes.
This positive effect of inflation on collection is noticeable, for example, in the 20.8% increase experienced by VAT revenues, a tax that is closely linked to consumption and thus has a huge impact on the price evolution thereon.
Similarly, current taxes on income and wealth increased 36.3% on personal income tax, which increased 44.7% on income from the first tranche of the income tax return. Income tax for non-residents for its part increased by 59.3%. On the other hand, the improvement in corporate profits is reflected in a 31.6% increase in corporate tax collection.
The central government bears the largest deficit at 20.079 million (1.54% of GDP). But one of the most positive references is that of the Social Security deficit, which closed in August at 0.02% (EUR 287 million) after importing 8% more over the period (EUR 121.395 million). A much higher percentage than that of expenses, which were up 4.2% year-over-year.
The figure supports the mantra that the industry minister, José Luis Escrivá, has championed the revaluation of pensions with the CPI, which has unleashed experts’ fears about spending on this item in 2023.
His message is that despite this higher expected pension expenditure, income from social contributions has also been growing strongly for months. It should be recalled that the government estimates that the social security gap will decrease from 0.9% to 0.5% of GDP this year and that the target could even be exceeded by the end of the year at the rate at which income evolves.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
