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TEPAV: "Degradation Trend in Budget Performance"
11/06/2007 - Viewed 1724 times
Ankara - Pointing out the degradation in budget performance, TEPAV said "This means that, should the new administration which will be in office after the elections choose the option of continuing the program with the IMF, it is a serious probability that they will be in a position to undertake a new program which aims to overcome the measures taken which increase expenses and decrease revenues in the election term."
Fiscal Monitoring Report - 2007 April Budget Results prepared by the Economy Policies Research Foundation of Turkey (TEPAV) Economic Stability Institute has been published.
In the report, it is said that "The central government budget has realized 65.8 billion YTL in cumulative expenses and 60.4 billion YTL in cumulative revenues in the period January-April. Despite the positive effect of TELEKOM collection, the budget had a deficit of 5.4 billion YTL especially due to lower than expected tax collections." The report, which stated that even after correcting for last year's effect on expense side an increasing trend especially in primary expenses was observed, said: "In fact, after the corrections have been done, primary expenses for the period January-March have increased by 8.6 %, compared to the same period of the previous year, whereas it has been 11 % for the period January-April. On the other hand, on revenue side even after correction for VAT for Exports, it is noteworthy that there has been a real decrease especially in tax revenues, compared to the same period of the previous year. As a result, taking into account that the term we are in is an election term, the trend of increase in expenses can be expected to increase, whereas VAT and special consumption tax reductions made by the recent measures can be expected to have an adverse effect on the indirect tax performance for which alarm bells have been ringing already. In such a case, we can foresee that the overall budget performance will worsen by the end of the year, although occasional periodic advances can be seen in some months. This means that, should the new administration which will be in office after the elections choose the option of continuing the program with the IMF, it is a serious probability that they will be in a position to undertake a new program which aims to overcome the measures taken which increase expenses and decrease revenues in the election term."
"We are waiting for SPO's statement"
IN TEPAV's report, it is reminded that previously the big differences between the local government accounts disclosed by the Ministry of Finance and local government accounts disclosed by the SPO have been pointed at and it has been questioned whether SPO calculations had a methodological error, whether there have been interventions to these accounts and clarification of this issue has been being demanded. In TEPAV's report it was stated that in the three page press statement of the SPO, mainly the issues they have raised have not been addressed; rather the current situation was defended and it was stated that this was a matter of scope and methodology. There was no explanation as to what these scope and methodology were, and as to how the results which had been very different than those of the Ministry of Finance had reached. The report continued: "'The details of our methods aimed at local government balancing and the details of our figures in the context of the Ministry of Finance's data will be disclosed in the coming days.' In fact, the issue we raised in our March fiscal monitoring report was the demand for explanation of this information to public. Because the public has the right to know the real condition of local government accounts and which institution is responsible for this reality. If instead of a three page defense of the situation, SPO press statement consisted of this last paragraph only it would have fulfilled a more beneficial role with respect to institutional accountability to the public. We will continue monitoring the extent to which the commitment of ‘informing public' mentioned in the last paragraph of the press statement will be fulfilled."

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