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Wednesday 21.02.2018 | Name days: Eleonora, Ariadne
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FM: budget deficit of 2012 notably lower than initially expected

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Last year, the balance of the state consolidated budget was positive in terms of money flow, forming a surplus of 19.2 million LVL. Compared with 2011, the balance has improved by 473.9 million LVL. A previous state budget surplus was only noted in 2007.

The completion of the fiscal index was improved by a better than expected macro-economic situation in the country, as well as changes made to regulations and administrative measures carried out by the State Revenue Service (SRS), as reported by the Finance Ministry (FN).

Given the completion of the state consolidated budget in terms of money flow and corrections by the EKS’95 methodology, the FN’s provisional assessment of the overall budget deficit of 2012 is 1.5% of GDP, which is notably lower than its initial goal of 1.9%.

According to the State Treasury’s official data on budget completion of 2012 January-December period, revenue of the state consolidated budget, when compared to 2011, increased by 657.3 million LVL (12.9%). The total tax revenue of 2012, aside from state funded pension finances, formed 4 289.1 million LVL, which is by 408 million LVL (10.5%), more than there was in 2011.

“The increase of 2012 revenue was influenced by the increase of tax revenue. Nonetheless, non-tax revenue and foreign financial assistance notably exceeded those of 2011. Employment and working wages increase contributed to a better completion of work tax collection, while good retail trade indexes ensured an increase of VAT revenue,” – comments Finance Minister Andris Vilks.

Last year’s state consolidated budget expenses, compared with 201, increased by 183.4 million LVL (3.3%) and formed 5 723.6 million LVL. The total expense increase was mostly dictated by the increase of maintenance costs by 198.2 million (4.0%).

The municipal consolidated budget, when compared with 2011, had an increase of financial deficit of 12.6 million LVL and was 62.5 million LVL. Such changes can be explained with a more rapid increase in expenses in comparison with income. There was a notably higher PIT and real estate tax revenue in the municipal budget (by 47.8 million LVL and 7.2 million LVL respectively), as well as a small increase in non-tax revenue.

Municipal expenses increased in nearly every position, while expenses for social benefits were notably lower. According to official monthly reports, Riga city budget had a deficit of 12.8 million LVL in 2012. A state of deficit was also noted in other cities.

Ref: 102.109.109.5869


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