Government generates more revenue from VAT and income tax

In January-July 2017, Government’s Consolidated Fund registered a deficit of €105.0 million,

Compared to the same period last year, recurrent revenue registered an increase of €253.6 million whereas total expenditure went up by €217.6 million. This resulted in a positive change in the Government’s Consolidated Fund by €36.1 million, according to the National Statistics Office.

In January-July 2017, recurrent revenue was recorded at €2,160.6 million, up from €1,907.0 million last year. The comparative increase of 13.3 per cent was primarily the result of higher Value Added Tax and Income Tax which increased by €59.9 million and €42.1 million respectively.

Moreover, increases were also recorded for Grant (€36.2 million), Fees of Office (€33.8 million), Social Security (€26.2 million), Customs and Excise Duties (€23.4 million), Licences, Taxes and Fines (€17.2 million), Dividends on Investment (€7.2 million), Reimbursements (€7.0 million) and Rents (€2.4 million). Conversely, decreases were mainly recorded in Miscellaneous Receipts (€1.6 million).

Compared to January-July last year, total expenditure stood at €2,265.6 million up from €2,048.0 million due to added outlays on recurrent expenditure and capital expenditure which outweighed lower spending on interest payments.

Recurrent expenditure stood at €1,976.1 million from €1,769.5 million last year. The main contributors to this increase were Programmes and Initiatives and Personal Emoluments with a rise of €175.4 million and €21.9 million respectively.

The main developments in the Programmes and Initiatives category involved added outlays due to social security benefits (€71.9 million), Health Concession Agreements (€25.2 million), higher EU Own Resources (€23.7 million), EU Presidency 2017 (€17.8 million), state contribution (€6.2 million which also features as revenue), Jobsplus Programmes (€6.1 million), Public Service Obligations (€4.3 million), child care for all (€2.7 million), Medicines and Surgical Materials (€2.2 million) and allocation to local councils (€1.5 million).

Contributions to Government Entities increased by €12.3 million. Decreases were registered in Operational and Maintenance Expenses (€3.0 million).

The interest component of the public debt servicing costs stood at €125.0 million, down from €128.7 million last year.

Government’s capital expenditure witnessed an increase of €14.6 million, and was recorded at €164.4 million. This was mainly the result of higher spending on EU internal security borders and VISA (€5.9 million), road construction improvements (€5.3 million), investment incentives (€5.0 million) and higher capital spending on University of Malta (€3.4 million). On the other hand lower outlays related to EU external borders fund were recorded (€3.8 million).

At the end of July 2017, Central Government Debt stood at €5,548.0 million, up by €0.1 million over the corresponding month last year. This was the result of higher Malta Government Stocks and Euro coins issued in the name of the Treasury, which added €154.2 million and €6.4 million respectively.

On the other hand, Treasury Bills and Foreign Loans went down by €138.9 million and €10.4 million respectively. Higher holdings by government funds in Malta Government Stocks resulted in a decrease in debt of €11.3 million.