BRATISLAVA September 24, (WEBNOVINY) — Revenues of the public administration from collected taxes and payroll levies next year should be EUR 763.1 million higher from the Finance Ministry’s latest estimates from June of this year. The new government’s measures intended to increase budgetary revenues account for EUR 567.5 million of this sum. Changes to the currently effective tax rates should increase the prognosticated revenues by EUR 260.6 million. On contrary, the expected economic slowdown next year cuts the expected revenues from taxes and payroll levies by EUR 102.6 million.
Finance Ministry’s Financial Politics Institute also predicts an increase in tax and payroll tax revenues compared with the estimate from June of this year by EUR 661 million in 2012 and by EUR 669.6 million in 2013. The faster economic growth should bring EUR 171.7 million more to public budgets this year compared with June’s prognoses, according to the updated forecasts of the Finance Ministry.
The ministry informed that tax and payroll levy revenues should be EUR 546.4 million and EUR 216.6 million higher respectively next year compared with June prognosis. In 2012, tax revenues should be higher EUR 393.2 million and payroll payments should go up EUR 267.8 million. In 2013, tax revenues should swell EUR 406.4 million and payroll taxes are to be EUR 263.2 million higher. Revenues of the public administration from collected taxes should be EUR 113 million higher and payroll taxes should increase EUR 71.8 million this year.
The published prognosis of tax revenues was labeled realistic by members of the tax committee at the Financial Politics Institute. The National Bank of Slovakia (NBS) shares this assessment. However, the central bank stated in its commentary that since the tax prognosis was drawn up on the basis of at that time not completely approved composition of planned consolidation, risks of potential different development may occur.
Accounting of value-added tax (VAT) with regard to completion of three sections of the second package of PPP projects also plays its part in the prognosis. “Both the NBS and Finance Ministry are considering a one-off revenue totaling EUR 150 million from collection of VAT, which is connected with the planned completion of three sections of PPP projects. However, this revenue has a neutral effect on the budget since it burdens budgetary expenditures in the same amount,” states the central bank in its commentary.
Tatra Banka, which also has its representative in the tax committee, does not cast its doubts on the prognosis either but the reality may be different with regard to the amount of tabled changes. “Since number of essential legislative changes is being introduced, uncertainty of revenue prediction is higher than usually. On that account, planning on the side of expenditures should be more conservative than in the past,” suggests Tatra Banka.
The new government’s priority goal is to push down the general government deficit below 3 percent of GDP as defined within the Maastricht Criteria by 2013. The first step to achieve this goal should be ambitious next year’s consolidation that should cut this year’s expected deficit of 7.8 percent of GDP to 4.9 percent. An increase in VAT rate from 19 to 20 percent, cancellation of tax and payroll tax exemptions as well an increase in some excise taxes are the measures to increase budgetary revenues.
SITA
