The corporate income tax reduces the deficit (Budgetary Traffic Light July 2023)

  • 28. 7. 2023

Secretariat of the Council for Budget Responsibility (SoCBR) estimates the 2023 General Government Budget (GGB) deficit at 5.6 % of GDP

• SoCBR has slightly decreased the estimated level of GGB deficit in 2023. Positive difference compared to the June forecast amounts to EUR 177 million. Under the assumption that the government does not take additional measures, the deficit can reach the amount of EUR 6 819 million (5.6 % of GDP). Month-to-month decrease of the GG deficit level is caused by higher revenue from the corporate income tax and decrease in the expenditure of other GG entities on energy.

• Estimated deviation between the SoCBR’s forecast for the 2023 GGB balance and the approved budget is positive at 0.8 % of GDP, which means that the risk of the public deficit level rising above the government objective remains low.

• Compared to the government’s estimate published in the Stability Programme for years 2023 to 2026, the level of the deficit forecast by SoCBR is lower by 0.7 % of GDP.

• Expected expenditures of government measures to compensate high energy prices reach the level of EUR 2 889 million (2.4 % of GDP), of which expenses in the amount of EUR 1 056 million (0.9 % of GDP) should be financed from EU funds. After considering budgeted reserve, revenue from the windfall taxation of petroleum companies and electricity production companies is the overall budgetary impact of measures lower than budgeted level in the amount of EUR 1 540 million (1.3 % of GDP).