Budget, Financial Services, Latvia
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Friday, 29.03.2024, 06:58
General budget revenue plan in Latvia has been fulfilled by 91.8% in first five months - Finance Ministry
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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