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

    RIGA, June 26 (LETA) - In the first five months of the year, EUR 4.709 billion were received in total budget revenue and the tax revenue plan was fulfilled by 91.8 percent, or the revenue was EUR 311.4 million 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 percent of the planned amount.

    Of the large taxes, only personal income tax (PIT) revenue exceeded the plan by EUR 49.3 million or 7.6 percent, 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 million (-14.4 percent), EUR 65.6 million (-14 percent), EUR 41 million (-31.1%) and EUR 64.2 million (-5.4%) respectively.

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

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

    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 billion, which was by EUR 337.8 million or 7.8 percent 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 million in the first five months of the year, it was EUR 455.7 million 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 million, while the local government budget had a surplus of EUR 125.4 million. 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 million or 1.6 percent. 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.

    • Published: 26.06.2020 15:43
    • Ivars Motivans, LETA
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