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On the other hand, general government fiscal expenditures in the first half of the year amounted to 4.93 billion euros, up 7.4% or 341.8 million euros compared with the same period last year. at the same time last year
. creating a surplus of 477.7 million euros, which exceeds the general budget surplus of 247 million euros for the corresponding period of the previous year
FM explained that The nominal increase in revenue was recorded for tax revenues of 371.5 million euros, 9 7% higher than last year in the corresponding period. The product of the corporate tax (UIC) increased by 53.2 million euros, or 23.4%, which is explained by the increase in profit before taxes of exercise, reflected in the UIN statements presented
. social insurance contributions, also taking into account the rise, rose by 158.9 million euros or 14.4%, while consumption taxes such as excise duties and Value Added Tax (VAT) accounted for 53.5 million euros or 12.5% and an increase of 95.9 million euros or 9.4%.
Income from personal income tax (INI) increased by 4.6 million euros, or 0.6%, taking into account the differentiation of rates and tax changes . The increase in tax revenues in general is attributable to the rise in wages in the country and the sharp increase in retail sales as well as the changes introduced by the tax reform on January 1 of this year. The average salary in the country in the first quarter of this year was 8.6% higher than last year, while the turnover of the first five months of the year was higher 7% to the five months of 2017.
financial badistance and non-taxation. The increase in revenue from foreign financial aid is facilitated by the more active implementation of European Union (EU) fund projects. Compared with the first six months of the previous year, receipts from foreign financial aid to the general budget increased by 109.5 million euros, or 23.2%. In turn, non-tax revenues increased by 98.5 million euros, or 29.3%. The increase in these revenues can be explained by the amount of dividends paid by AS Latvenergo on the retained earnings of the previous years. In addition, the basic budget received a one-time payment – an additional bonus of 22.4 million euros.
The implementation of tax revenues in the first half was in line with the plan, but it differed in terms of taxes. The IPU's business figure stands at 58.4 million euros, or 26.4% more than expected, while VAT and IIN revenues are up 45.4%. amounted to 38.8 million euros, or 3.4% and 24 million euros, 2.9% less than expected. The non-compliance with the VAT plan results from the decrease in the value of standard taxable transactions, mainly influenced by the introduction of a reduced VAT rate on fruits and vegetables characteristic of Latvia and by the l & # 39; 39, increase in the transactions paid by the recipient of the goods or services. In turn, the non-execution of the IORP plan is still linked to the currently lower income of dividends paid on the companies' cumulative earnings of previous years than expected. At the same time, social security and excise contributions were well planned in the first half of the year.
On the other hand, the increase in budget expenditure in the first half of the year is explained by the increase in EU spending, especially at the municipal level. Grants and subsidies increased by 90.1 million euros, or 10.6%, also affected by the implementation of active projects of European funds and the increase of subsidies in the health sector , including the reimbursement of drugs.
increase in expenditure. Overall, goods and services grew by 58.8 million euros, or 9.6% in the first half, and an increase of about 20 million euros in growth was attributed to defense functions already mentioned. In addition, with the increase in the minimum wage and the average wage increase, reimbursement and social badistance expenses, including pensions, increased by 71.5 million euros or 6. , 5% and 70.6 million euros or 5% respectively in the general budget.
Interest charges on public and municipal debt service decreased by 20.9 million euros or 10.3%.
In the first half, the surplus of 290.1 million euros increased in the state budget both in the core budget of the state and in the state. the special budget, determined by the high level of revenue of the state's basic budget, given the increase in foreign financial aid and non-tax revenue as well as the inclusion of foreigners; a point of social contributions in the basic budget.
A large surplus of 54.7 million euros was also found in the state 's special budget. a deficit of 12.7 million euros. Special budget revenues have increased by 10%, while expenditures have increased by 4.3% compared to the first half of 2017. The relatively moderate increase in expenditure can be explained by a decrease in the number of beneficiaries of pensions, which according to the National Social Insurance Agency, declined by 1.1% in May this year, compared with the same period last year. Despite the evolution of the financial sector, the number of employees in the banking sector declined by 1.4% in the first half, due to restrictions on the activities of banks with fictitious companies and the decline deposits of non-residents. According to data from the agency, the number of registered unemployed at the end of June this year, compared with the end of June 2017, decreased by 7589 people or 11.4%. Expenditure on unemployment benefits in the coming months will be affected in the coming months, but modest growth and budget overruns for 2018 can be expected.
In the municipal budget , the surplus stands at 43.1 million euros less than in the first half of last year. The revenue increase is moderate given the high income of the IRP.
The MI predicted that general budget expenditures would increase more rapidly at the end of the year and that a financial deficit would develop. It will also be strongly affected by the base effect of the UIN's earnings, which will be significant in the second half of this year, with the cancellation of advances from the UIN. According to the calculations of the Ministry of Finance, which are included in the Latvian Stability Program for 2018-2021, the general government budget deficit should be 0.9% of gross domestic product, or 271.8 million euros. in 2018.
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