Based on comparable figures, revenue from indirect taxes declined 3.7 percent from 2011 and revenue from direct taxes fell 9.4 percent, the Finance Ministry’s budget office said last night in a report on its website. Spending fell 2.1 percent, with personnel costs dropping 18 percent.
The government aimed for a 2012 budget gap equal to 5 percent of gross domestic product to comply with the terms of the aid package. The Finance Ministry last night posted a preliminary full-year deficit for the general government of 5 percent of GDP, beating a 5.4 percent target in the bailout program.
Portugal last year was given more time to narrow its budget deficit after tax revenue missed forecasts and the economy heads for a third year of contraction in 2013. It aims for a deficit of 4.5 percent in 2013 rather than 3 percent. It will only cut the deficit below the European Union’s 3 percent limit in 2014, when it targets a 2.5 percent gap.
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