Budget, Financial Services, Latvia

International Internet Magazine. Baltic States news & analytics Thursday, 22.04.2021, 21:21

General budget revenue plan in Latvia has been fulfilled by 91.8% in first five months - Finance Ministry

BC, Riga, 27.06.2020.Print version
In the first five months of the year, EUR 4.709 bn were received in total budget revenue and the tax revenue plan was fulfilled by 91.8%, or the revenue was EUR 311.4 mln lower than planned, the Finance Ministry informed LETA.

In the general budget in the first five months, almost all tax revenues lag behind the planned amount, with the non-fulfillment of the tax revenue plan increasing - in May it was at 74.4 % of the planned amount.

Of the large taxes, only personal income tax (PIT) revenue exceeded the plan by EUR 49.3 mln or 7.6%, which can be explained by a significant overrun of the PIT plan in January and February, when settling dividend payments at the end of 2019, the ministry points out.

Revenue from value added tax (VAT), excise duty, corporate income tax (CIT) and social security contributions were lower by EUR 156 mln (-14.4%), EUR 65.6 mln (-14%), EUR 41 mln (-31.1%) and EUR 64.2 mln (-5.4%) respectively.

In the first five months of the year, the total budget revenue was by EUR 117.9 mln or 2.4% less than in the corresponding period last year.

The ministry noted that in May, general government tax revenue decreased sharply - by 17.9% compared to May last year, while benefits (excluding pensions) increased significantly - by 44.1%.

The ministry explains that the Covid-19 crisis, the direct impact of which was felt in Latvia from mid-March, has already had a significant impact on Latvia's economic growth and the measures taken to contain the pandemic have significantly reduced private consumption. The economic situation also has a direct impact on changes in revenue in the general budget.

In turn, the total budget expenditures in the first five months reached EUR 4.651 bn, which was by EUR 337.8 mln or 7.8% more than in the corresponding period of the previous year. This was determined by the allocation of funding to various programs for supporting business, an increase in expenditures for financing the health sector, as well as higher expenditures for social benefits, the ministry explained.

Although the general budget had a surplus of EUR 58.7 mln in the first five months of the year, it was EUR 455.7 mln lower than in the corresponding period last year.

In the first five months of the year, the state budget had a deficit of EUR 66.7 mln, while the local government budget had a surplus of EUR 125.4 mln. The Ministry of Finance explained the different situation by the fact that the support measures approved by the government are mainly financed from the state basic budget, as well as the decrease in tax revenue in the state budget was larger than in the local government budget.

Compared to January-May last year, tax revenue in the general budget has decreased by EUR 58.2 mln or 1.6%. The Ministry of Finance informed that the decrease in tax revenue compared to the respective period of the previous year has been observed since March, which was determined both by the decline in economic activity due to Covid-19 restrictions and the granted extensions of tax payment terms.


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