The national public budget was executed on the revenue side in the first 5 months of the year in the amount of 42.6 billion lei, an increase of 3.7 billion lei, or 9.6% compared to the same period last year. The largest contribution to this increase was the 16.9% increase in social security contribution collections. Tax revenues from taxes on goods and services, which traditionally account for about two-thirds of total national tax revenues, also increased by 1.8 billion lei, or 7.1%.

While revenues from income taxes, the next major category of revenues accounting for about one-third of total national public budget revenues, did not increase at all compared to last year. In the first 5 months of the year, 7.4 billion lei were collected from this source, or 6.1 million lei less than in the same period last year. This situation is a consequence of the 14.3% reduction in revenues from the corporate income tax this year. Meanwhile, revenues from personal income tax increased by 21.8%.

These changes occur in the absence of substantial changes in the regulations related to the application of these taxes and may be associated with developments in the national economy in recent times. Thus, one plausible explanation for this situation is the redistribution of income between employers and employees in the real sector of the national economy in favor of the latter, associated with an increasingly acute labor shortage in the national economy, and the need to increase real incomes of employees after they were significantly reduced during the previous inflation crisis.

Another explanation, however, is that the economic situation remains difficult. In the last five years, a similar situation, characterized by a significant decline in corporate income tax collections, also occurred in 2020, against the backdrop of administrative restrictions and difficulties created by the health sector crisis.

Revenues from corporate income tax, compared to the situation in 2023, are on a downward trend over the last 3 months of the current year, starting in March, after only marginal growth in February of 2.7%, at a rate even lower than the annual inflation rate for that month.

Assessing the performance of the national economy towards the end of 2024 cannot be conclusively determined solely based on the analysis of the evolution of this indicator; however, the emergence of indications of problems facing the real sector of the economy cannot be ignored.