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TEPAV: "Degradation in the Budget has Become Very Serious"
09/11/2007 - Viewed 2216 times
ANKARA- After the corrections for local government and fund shares have been made, budget deficit has become 12.2 billion YTL as of end of September. Considering this figure was 2.4 billion YTL in the same period last year, it is observed that the budget deficit has reached to very serious figures.
The Fiscal Monitoring Report, prepared by Economic Policy Research Foundation of Turkey (TEPAV) Economic Stability Institute - 2007 September Budget Results has been published. The report said "When we calculate the budget deficit, as we have done in previous fiscal monitoring reports, excluding privatization revenues (revenues from the sale of TELEKOM shares and sales of land in the scope of privatization) which are booked in the central budget revenues, we see that the deficit goes up from 3,8 billion YTL to 19,1 billion YTL. This points to a jump of more than 400% in budget deficit." The report which stated that the rapid increase in budget expenditures and especially the low performance in indirect tax revenues were the main factors causing the degradation of the central government budget balance continued "Thus, the risk of degradation in budget balance, which we have been pointing out since the beginning of the year, has begun to be realized and reflected in the disclosures of public authorities."
Tax revenues are below the target In TEPAV's report, it is stated that only 70,6 % of the total tax revenue target has been reached as of end of September. The report continued:
"We think that the following factors, which we had pointed out in some of our TEPAV fiscal monitoring reports, also had an impact on the lower than target realization of 2007 budget tax revenues:
- Private sector expenditures did not increase because of the relative slow down in aggregate demand in the Economy,
- Energy price increases targeting state economic enterprises have been delayed,
- Some public enterprises, including state economic enterprises and local governments, were not able to fulfill their liabilities,
- Domestic taxes started to fall short of target figures due to valuation of the YTL,
- VAT returns for exports increased rapidly,
- VAT for sectors like textiles and food was decreased,
- Revenue increasing policy measures which were stated in the letter of intent signed in May 2007 were not realized effectively enough,
- Upon entering into an election atmosphere the revenue administration exhibited an indisposition to collect revenue .
Expenditured can be deferred …
In TEPAV's report, it is stated in an on-line press release of the Minister who is responsible for the Undersecretariat of Treasury, the reason for the fact that public sector primary surplus performance has been 4,3 %, instead of 6,5 % had been identified to be impacted by deferred expenditure liabilities from the previous year. The report continued "We would like to point out that such expenditure deferrals, which were done to portray last year's budget to be in better shape, can be brought up this year as well, to prevent budget balances from further degradation."


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