State deficit until August rose 550 million compared to 2020 – Observer

At the end of August, the general government deficit reached 6878 million euros in public accounting. This value represents an increase of 550 million euros compared to the same period last year that the Ministry of Finance attributes to the extension of the deadline for the delivery of VAT in August.

In the first eight months of the year, expenditure rose 5.1%, more than revenue, which grew 4.7%, which is explained by the fact mentioned above. Primary expenditure accelerated by 6.5%, influenced by extraordinary measures to support the economy and the strengthening of the National Health Service, according to João Leão’s ministry in a statement.

According to the summary of budget execution released earlier this evening, without the expenditure associated with the measures under COVID-19, the effective expenditure of general government would have grown 2.4% compared to the previous year (instead of +5.1% ) and effective revenue would have increased by 3.9% (instead of +4.7%).

In tax revenue, DGO highlights the growth in personal income tax (+9.5%) and the falls in income from corporate income tax (-12.1%) and VAT (-1.8%). Revenue from contributions to social protection systems grew 7.6%.


Also according to the same source, expenditure on extraordinary measures to support companies and families reached 4685 million euros, which represents an amount greater than that carried out in the entire year of 2020.

In this cake, we highlight the support granted by the Social Security of 1489 million euros, which, according to the Finances, has already surpassed the budgeted amount for 2021 (almost double) of 776 million euros. The biggest share was to support employment, with 856 million euros. Income support for workers amounted to 380 million euros. The benefits for illness and prophylactic isolation cost 157 million.

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Of the support channeled to support the fixed costs of companies, Finance highlights the 490 million euros allocated under the regime of progressive resumption of activity and 366 million euros for the simplified layoff. The incentive to return to normal activity mobilized 305 million euros. On the revenue side, the exemption from TSU and the deferral of tax payments, such as the aforementioned VAT, amounted to 482 million euros.

Tax revenue grew 1% until August, discounting the extraordinary effects of the postponement of payments and installments. Contributions to Social Security increased by 6.4%, which reflects, says the ministry, the positive evolution of the labor market, but also the fact that the layoff this year has supported 100% of salaries.

Spending on the National Health Service increased by 9.7%, with emphasis on the “very high increase in personnel expenses (9.5%), as a result of the significant increase in the number of health professionals” which increased in August 4 .9% and from the acquisition of goods and services. The Ministry of Finance points out that these increases result from the implementation of measures in the Budget for this year, which foresaw an increase in hiring for the NHS, as well as the payment of risk subsidies for combating the pandemic.

Another item to weigh on health expenditures were the amounts mobilized until August for the purchase of vaccines against Covid-19, which totaled 215 million euros until August, about double the amount spent on the purchase of tests, which represented 109 million euros .

The ministry also notes a 4.7% increase in spending on salaries in the state, which reflects hiring people, but also career advancements, and highlights the 5.7% rise in spending on salaries of employees. teachers.

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