site.btaFinance Ministry Reports Positive CFP Balance as at August 2016

Finance Ministry Reports Positive CFP Balance as at August 2016

Sofia, October 2 (BTA) - Based on the monthly data of first-level spending units, the Consolidated Fiscal Programme (CFP) balance on a cash basis as of August 2016 is positive, amounting to 3,317.0 million leva, or 3.7 per cent of the projected GDP, and is formed by a national budget surplus of 1,913.1 million leva and by a surplus of EU funds of 1,403.9 million leva. For comparison, a CFP surplus of 622.0 million leva (0.7 per cent of GDP) was reported in the first eight months of 2015, which means that, as a relative share of GDP, the budget stance has improved by 3.0 percentage points. The factors behind the improvement in the budget stance continue to be the higher revenues and the cutting of expenditures in comparison to the same period of the previous year. In addition to the good national budget revenue parameters, the EU fund accounts also influence the current CFP balance, with the excess of revenues over expenditures there accounting for 1.6 per cent of the projected GDP.

The CFP revenues and grants in August 2016 stand at 23,015.1 million leva, or at 69.7 per cent of the annual estimates. Compared to the first eight months of 2015, revenues and grants have risen by 1,524.1 million leva, or by 7.1 per cent. The growth in comparison to the previous year is due to the higher tax and non-tax revenues which have grown by 1,700.5 million leva, whereas grant proceeds (Commission refunds) have dropped by 176.4 million leva. Nevertheless, the execution of grant proceeds as against the estimates is good, with domestic and foreign grant proceeds, mostly end-2015 certified expenditures reimbursed under the EU operational programmes and funds for the old 2007-2013 programming period, and advance payments received by the Commission for the new 2014-2020 programming period, amounting to 2,217.1 million leva, which accounts for 87.2 per cent of the annual estimates.

The tax proceeds, including revenues from social security contributions, total 17,906.1 million leva, which accounts for 68.9 per cent of the revenues planned for the year. Compared to August 2015, tax proceeds have risen in nominal terms by 8.2 per cent, or by 1,352.0 million leva. In structural terms, the proceeds from indirect taxes report the most considerable growth.

The direct tax revenues amount to 3,280.0 million leva, or 70.0 per cent of the annual estimates, growing as against August 2015 by 273.2 million leva, or by 9.1 per cent.

Revenues from indirect taxes amount to 9,138.1 million leva, which accounts for 68.9 per cent of the 2016 State Budget of the Republic of Bulgaria Law estimates. Compared to the previous year, the proceeds in this group have grown by 736.8 million leva, or by 8.8 per cent. The VAT proceeds in the first eight months of the year amount to 5,834.9 million leva, or 69.4 per cent of those planned for the year. Compared to the previous year, the VAT revenues have risen by 447.5 million leva. The amount of the non-refunded VAT as of end-August is 130.2 million leva. There is also a growth in the excise duty revenues which amount to 3,164.4 million leva, or 67.8 per cent of the annual estimates, while as against August 2015 they have grown by 9.3 per cent, or by 269.1 million leva. The customs duty proceeds amount to 116.1 million leva, or 77.4 per cent of the estimates for the year.

Proceeds from other taxes, including property taxes and other taxes under the Corporate Income Tax Law, amount to 730.8 million leva, or 80.2 per cent of the annual estimates.

Revenues from social security and health insurance contributions are 4,757.1 million leva, which accounts for 66.7 per cent of the estimates for the year. Compared to the previous year, the revenues from social security contributions have risen by 5.4 per cent, or by 245.2 million leva, in nominal terms.

Non-tax revenues amount to 2,891.8 million leva, which accounts for 64.5 per cet of the annual estimates, and is by 348.5 million leva, or 13.7 per cent, more than end-August 2015.

The Consolidated Fiscal Programme expenditures, including the contribution of the Republic of Bulgaria to the EU budget for August 2016, amount to 19,698.1 million leva, which accounts for 56.6 per cent of the annual estimates. For comparison, the CFP expenditures as of August 2015 amount to 20,868.9 million leva. The lower absorption of expenditures in the first eight months of the year is mostly linked to a delay in some capital expenditures (mostly EU fund accounts), which is due, on the one hand, to the low absorption at the initial stage of project implementation during the new 2014-2020 programming period, and, on the other hand, to the shifting of the majority of capital expenditures to the last quarter of the year due to some technological and procedural factors.

Non-interest expenditures amount to 18,616.0 million leva, which accounts for 57.1 per cent of the annual estimates. Non-interest current expenditure as of August 2016 amount to 17,312.7 million leva, or 65.3 per cent of the annual estimates, capital expenditures (including net increment of state reserve) amount to 1,303.3 million leva, or 21.3 per cent of the 2016 State Budget of the Republic Bulgaria Law estimates. Interest payments amount to 545.7 million leva, or 68 per cent of those planned for 2016.

The part of Bulgaria's contribution to the EU budget, as paid as of August 2016 from the central budget, amounts to 536.4 million leva, which complies with the existing legislation in the area of EU own resources, Council Decision 2007/436/EC, Euratom on the system of the Communities' own resources and Council Regulation No 1150/2000, as amended by Regulation No 2018/2004, Regulation No 105/2009 and Regulation No 1377/2014, implementing Decision 2007/436/EC.

Fiscal reserve as of August 31,2016 is 14.5 billion leva, including 12.9 billion of deposits in the BNB fiscal reserve and in banks and 1.6 billion of receivables under the EU Funds for certified expenditure, advance payments, etc.