The flow of funds from taxpayers and Portugal’s companies into the State’s coffers has helped the overall deficit figure ease to a year-to-date figure for general government spending of €569 million, better than last year’s €2.29 million.
The result of collecting an average of €113 million-a-day in taxation has contributed to a 4.1% growth in tax revenue and an increase in Tax Authority expenditure of 0.1% - a figure the Finance Ministry calls “residual.”
Finance Minister, Mário Centeno, commented, this "continued favorable evolution of the deficit reinforces confidence in the budgetary targets set for 2017." The fourth quarter traditionally shows more spending and less revenue with the Christmas subsidy in November and a €1.5 billion payment due to the EU.
On the tax revenue side up to the end of September, there has been a 7.1% increase in revenue from VAT and 21.8% increase from corporation tax as the economy continues to recover, pushing contributions to Social Security up by 6.3%.
The reliving of just over €31 billion in taxes to the end of September was an increase of 6% (or €1.762 billion in cash terms).
The position exceeds the forecasts in the 2017 State Budget, reflecting "mainly the acceleration of activity economic growth at a faster pace than expected," according to the budget commentary.
The government commented that there was a 29.7% increase in its investment payments, (excluding PPPs) and an increase in National Health Service expenditure 4.4% percent higher than budgeted for as the government grapples with the consequences of years of under-investment
The good economic news is marred by a 12% rise in the cost of servicing Portugal’s Private Public Partnerships where charges went up in the first half of the year to €926.4 million, admitted the Technical Unit for Project Monitoring at the Ministry of Finance.
The road concessions alone, including the Algarve’s Via do Infante, cost €50 million over budget as laid out in a series of secret contracts that taxpayers and MPs are prohibited from reviewing.
