Further improvement public finances

© ANP
Government revenue from taxes and social contributions over Q1 2016 and the last three quarters of 2015 was higher than in the four quarters of 2015. According to Statistics Netherlands (CBS), public deficit and public debt, both expressed as a percentage of gross domestic product (GDP), decreased.
Public deficit over Q1 2016 plus the three preceding quarters amounted to 1.6 percent of GDP. According to EU regulations, public deficit for an entire calendar year should not exceed 3 percent of GDP. Public deficit over the entire year 2015 stood at 1.9 percent.

By the end of Q1 2016, public debt was 442 billion euros, more or less equal to the end of 2015. As GDP over Q1 increased, the debt ratio declined by 0.3 percentage points to 64.8 percent of GDP. As a result, the debt-to-GDP ratio fell further towards the EU target of 60 percent of GDP.


More government revenue in Q1

On an annual basis, public revenue totalled 294 bn euros, i.e. more than 1 bn euros above the total over 2015. Revenues from corporate tax, VAT and social contributions increased in particular, to 3 bn euros. Non-tax revenue declined by 2 bn euros, mainly due to lower revenue from natural gas.

Higher revenue from taxes and social contributions increased the burden imposed by taxes and social insurance contributions, measured as a percentage of GDP. The burden imposed by taxes and social insurance contributions has risen steadily over the past few years. Since 2014 the burden has been in excess of 37 percent, versus 34.5 percent in 2004.

With 305 bn euros, public expenditure was almost equal to 2015. The government spent less on goods and services; public investments were also below the level of the same quarter last year. Interest costs and government contributions to the European Union also decreased. Wages and benefits rose in Q1 2016.

Sources