The fiscal space for new tax cuts in 2025 and 2026 is shaped by the 2024 budget, which already exceeds the targets set. According to 11-month data, tax revenues amounted to EUR 60.67 billion, exceeding the target by EUR 106 million.
Targeted Interventions
The extra revenue funds announcements such as:
- A risk allowance of €100 for 152,000 uniformed personnel.
- Free medicines for 132,000 EHIC beneficiaries.
The interventions, costing €147 million, are covered by the primary expenditure growth ceiling of 3.71 TP3T under the new fiscal compact.
Revenue forecast for 2024
By the end of February, €5.3 billion is still to be collected to reach the annual target of €65.9 billion. In fact, an overrun of revenue of around EUR 300 million is foreseen.
Fight against tax evasion
Strengthening measures against tax evasion has already produced significant results:
- For 2024, tax evasion revenues amounted to €1.8 billion and are expected to increase in 2025.
- The full implementation of the measures for 12 months (instead of 8 in 2024) and the “deepening” of electronic controls will generate even more revenue.
- The growth of the economy and the increase in electronic transactions will act as a boost.
Expenditure and Prospects
Despite increased spending on armaments and pensions in 2025, there is room for adjustment.
- Spending lags by €1.77 billion in the 11 months to 2024, allowing for the possibility of not implementing “flexible” spending.
- Good management could pave the way for further positive interventions.