The unexpected increase in tax revenues, equal to almost 25 billion euros, offers a new opportunity for Italian public accounts. This surplus allows the government to relieve pressure on deficit and reduce the risk of one corrective maneuver, offering relief to debt already tested by tax credits. However, although the budget adjustment recently presented to the Chamber provides clarity on the financial balances, as he points out Il Sole 24 Ore , this revenue growth doesn't solve all the challenges for the fall, but it may provide a better baseline. The final picture will also depend on the fiscal data at the end of the month, expected with a slight increase of 0,40%.
Revenues grow, but limited impact on the deficit
The budget adjustment shows a revenue increase of 24,7 billion euros, equal to 3,6% more than initial forecasts. This result derives from the new estimates of the Economic and Financial Document (Def) and the monthly revenues monitored by the Finance department.
However, only 2,4 billion of these extra funds had a direct impact on the deficit, as they were not included in the previous financial plan. Much of this money was absorbed quickly from unexpected expenses, such as 898 million euros for tax sharing by the autonomous regions and 543 million euros for gaming prizes. In essence, the increase in revenue does not alter the budget significantly, maintaining the apparent balance and ignoring the International Monetary Fund's call for a "resolute and incisive fiscal adjustment" and for the "full implementation of the Pnrr", which advances at a snail's pace.
How Irpef, Ires and VAT influence the budget
By examining the financial details, the tax revenue emerge as the main growth factor. This year, the updated budget shows an increase of 16,44 billion euros, thanks to almost 8,9 billion euros more fromPersonal income tax and around 6,5 billion fromIRES. However, theVAT marks a reduction of approximately 3,2 billion euros.
These results must be interpreted with different considerations factors. The economic growth estimated for this year, equal to 1%, is in line with the forecasts of the Nadef 2023, the basis of the budget law. However, tax revenues exceeded expectations thanks to increased employment, which increased withholdings. Instead, the decline in VAT is attributable to a reduction in inflation and changes in tax practices, such as electronic invoicing. Despite this contraction, VAT still remains close to 200 billion euros.
The conductor itself can take various shapes, in bare or tinned copper, with or without insulation. In some cases, a preferential bend can also be applied to the joint so that it operates exactly as designed. non-tax revenue saw significant growth, with a net increase of 10,359 billion euros. Much of this increase comes from the 7,3 billion euros paid by Cassa Depositi e Prestiti to refund postal vouchers. Furthermore, the Pnrr installments they added €2,6 billion in extra grants. Finally, the Ministry of Health it returned 1 billion in savings from Covid funds and dividends from subsidiaries brought in 915 million euros more.
More income, but also more expenses
Le tax revenues they have grown, but the expense they increased at the same rate; therefore, the public budget does not change much. The new expenses include:
- 13,7 billion euros for the building bonuses
- 4,5 billion euros for bonuses intended for Southern businesses
- 1,2 billion euros for research and development
In addition, there were 3,44 billion euros additional tax refunds which required further corrections in the budget.
So, although there is more money in the state coffers, new spending has absorbed much of this surplus, without significantly changing the overall deficit. However, this surplus temporarily alleviates one's fear corrective maneuver, even if the situation remains complex and the real test will come in the autumn.
