Банкеръ Weekly

Briefs

ON THE TRACK OF THE FUTURE SURPLUS

In 2004 the state treasury abounds in additional revenues due to the economic excitement and the unprecedented tax collection rate. This is concluded in the report on the budget surplus making that the Minister of Finance Milen Velchev submitted to the National Assembly on November 15. The document was requested on October 22 after lively parliamentary debates on the allocation of the additional budget funds. The Coalition for Bulgaria group requested that the minister initiate amendments to the Law on the Organisation of the State Budget. Amendments were also wanted by the Novoto Vreme group which insisted on the adoption of a new regulation that would authorize the National Assembly and not the Government to decide the allocation of the budget surplus.Officially, the rage of the Parliament members arose from the levity demonstrated by the cabinet in the spending of BGN410MN ready money on various activities. Another BGN200MN were planned for 13th-month pensions and salaries.Meanwhile, it became clear that the budget plus reached BGN1.3BN as of September 30. The budget surplus has grown by further BGN100MN for just a month. Calculations indicate that BGN11.6BN have entered the budget and BGN10.3BN have been spent. A surplus amounting to BGN72.8MN is also reported by the municipal funds. Tax revenues for the period January-September exceed BGN6.154BN, the government financiers said proudly. That is 82.2% of all tax revenues expected in 2004. The collection of all types of taxes has been overfulfilled, but taxes on dividends, insurances, and duties have been the leaders.In his report Minister Velchev explained the 2004 budget anomaly with the increased import of consumer goods that raised the indirect tax revenues. Because of the higher fuel rates on the international markets the import value has grown which has resulted in higher VAT revenues. More money has been collected from excise duties, too, thanks to the increased rates on imported fuels and cigarettes.What is more important in this case, though, is how much the actual revenues exceed those planned by the 2004 budget makers, financial experts comment. As a whole, the budget planned a 2.4% growth of revenues. However, it already reached 12.7% in the end of September. It means that in the first nine months of the year the treasury has received BGN1.06BN above the plans. If the overfulfillment continues with the same speed, the surplus will have approximated BGN1.4BN and the revenues to the consolidated budget will have reached BGN15.8BN by year-end. Experts in the sector find it absurd that, considering these figures, revenues amounting to BGN16.06BN were planned in the 2005 budget (which is just 1.7% more compared to the 2004 plans). Even the inflation alone will make revenues to the treasury grow by more than 1.7 per cent. In practice, that is how the Government guarantees that a new serious surplus will be reported in the pre-election year 2005. In fact, this may be its real intention.

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