Financial position of general government improved in April to June 2022

State revenues from taxes grew

Central government total revenue grew by EUR 2.1 billion (13.2%) and total expenditure by EUR 0.8 billion (4.9%) from the quarter twelve months back. In monetary terms, the revenue item that grew most was income taxes. The strong growth in income taxes is partly due to the change in the withholding method of taxation at source on dividends for taxpayers with limited tax liability, which was introduced in 2021. In the second quarter of 2022, the net accrual of tax at source according to the Tax Administration's statistics was over EUR half a billion higher than in the second quarter of 2019 before the corona pandemic. The tax agreements remain in force, so major refunds are expected in the next few years. The adjustment of group allotments made to income tax and the reversion of the apportioned shares of corporate tax to the level prior to the coronavirus period also had a positive effect. 

Local government revenue was affected by current transfers and distribution of tax revenue

Local government's total revenue grew by EUR 0.1 billion (0.8%) from the respective quarter of the year before. Total expenditure increased by EUR 0.3 billion (2.4%). In monetary terms, the revenue item that grew most was central government’s current transfers and of expenditure intermediate consumption at purchaser's prices. Tax revenues were lower than in the quarter twelve months ago due to the adjustments of group allotments of income taxes, which benefited the state, and to the removal of the temporary 10 percentage point increase in local government’s apportioned share of corporate tax. 

Received social security contributions and property income improved the financial position of employment pension schemes

Employment pension schemes’ total revenue grew by EUR 0.6 billion (7.2%) and total expenditure by EUR 0.2 billion (3.2%) from the quarter twelve months back. Revenue was boosted in particular by received social security contributions and dividends. Revenues from pension contributions are affected by the growth in the wages and salaries bill of the national economy and changes in pension contribution percentages. In 2020, the employer's pension contribution percentage was temporarily reduced by 2.6 per cent from May to December due to the coronavirus. Employers will repay the reduction in full during 2022 to 2025, which is visible as an increase in social security contributions received. 

Other social security funds’ revenue and expenditure decreased

Other social security funds’ total revenue decreased by EUR 0.2 billion (4.2%) and total expenditure by EUR 0.2 billion (3.1%) from the quarter twelve months back. Of the income items, current transfers from central government and social security contributions received decreased most in monetary terms. Expenditure declined mostly due to the decrease in paid social benefits other than social transfers in kind.