site.btaEnd-September CFP Deficit Overshoots 2014 Target

End-September CFP Deficit
Overshoots 2014
Target


Sofia, November 1 (BTA) - The monthly reports of first-level
spending units show that the consolidated fiscal programme (CFP)
was in a deficit of 1,483.2 million leva as of end-September,
whereas the deficit projected for 2014 is 1,472.3 million leva,
the Finance Ministry said.

By comparison, the deficit as of end-September 2013 was 361.5
million leva, 1,121.6 million leva (1.3 percentage points of
GDP) less than a year later. The key factors in the formation of
the CFP deficit in the first nine months of 2014 are
underperformance of tax revenues and growth in expenditures,
especially those on EU funding accounts, social and health
insurance payments. More financing was released to replace the
payments suspended by the European Commission under Operational
Programmes Environment and Regional Development. Once they are
resumed, Bulgaria expects to be reimbursed for the certified
expenses, the Finance Ministry said.

The revenues and grants under the CFP for the reference period
stood at 21,555.7 million leva, 69.5 per cent of the annual
projection. CFP revenues as of end-September were up 248.3
million leva (1.2 per cent) on a year earlier. Total tax
revenues, including social security contributions, stood at
17,074.9 million leva as at end-September, 70.2 per cent of the
annual projection, as against 72.3 per cent a year earlier.
Compared to a year earlier, tax revenues increased 3.3 per cent
in nominal terms (552.0 million leva), considerably less than
projected in the 2014 National Budget Act.

Direct tax revenues stood at 3,113.0 million leva, 72.1 per cent
of the annual projection, up 270.3 million leva (9.5 per cent)
on a year earlier. Corporation tax revenues rose 5.5 per cent
(61.3 million leva). The proceeds from income taxes on natural
persons went up as well between January and September by 209.0
million leva, up 12.0 per cent on January-September 2013.

Indirect tax revenues added up to 8,631.9 million leva, 67.3 per
cent of the annual target, compared with 72.2 per cent a year
earlier. The decline by 4.9 percentage points is mostly due to
VAT and excise duty. Compared to the first nine months of 2013,
revenues increased by 31.8 million leva in nominal terms.

VAT revenues amounted to 5,515.5 million leva, 66.6 per cent of
the annual projection. Compared with a year earlier, VAT
revenues increased by 34.4 million leva. The planned increase is
12.4 per cent from 2013. Excise duty revenues totalled 2,987.1
million leva, 68.2 per cent of the annual projection.
January-September revenues were down 0.1 per cent on a year
earlier, while they were supposed to rise 7.9 per cent in 2014
on year. Customs duty revenues stood at 111.8 million leva, 82.1
per cent of the annual projection. Receipts from other taxes
(including property taxes and other taxes under the Corporate
Income Tax Act) stood at 648.8 million leva, 72.3 per cent of
the annual target.

Revenues from social and health insurance contributions stood at
4,681.2 million leva, 74.5 per cent of the annual projection,
increasing 5.0 per cent (224.3 million leva) in nominal terms on
year.

Non-tax revenues amounted to 2,697.9 million leva, 77.7 per cent
of the annual projection, down 221.6 million leva on a year
earlier due to one-off revenues in the first half of 2013 from
dividends to the State and an amount awarded to the State in an
arbitration case, the Finance Ministry said.

Domestic and foreign grants (including grants from the EU funds)
stood at 1,782.9 million leva, 55.1 per cent of the annual
target.

Expenditures incurred under the CFP between January and
September 2014 (including Bulgaria's contribution to the EU
budget) amounted to 23,038.9 million leva, 70.9 per cent of the
annual projection. Compared to January-September 2013,
expenditures rose by 1,370.0 million leva (6.3 per cent), mainly
due to accelerated absorption of EU aid and rising welfare
payments. Expenditures under EU aid accounts (including national
co-financing) rose 32.9 per cent (755.3 million leva) from a
year earlier, while national budget expenditures increased 3.2
per cent (614.7 million leva) on year. The increase in welfare
payments was largely due to the increase in pensions as of April
2013 and larger health insurance payments in the first months
of 2014. Expenditure performance was also influenced by decrees
issued by the previous government in the last months of its
term which approved extra expenditures of first-level spending
units.

Non-interest expenditures stood at 21,827.8 million leva, 73.3
per cent of the annual target. Non-interest current expenditures
totalled 18, 806.7 million leva, 75.7 per cent of the annual
projection. Capital expenditures ((including the net increment
of the state reserve) totalled 3,021.1 million leva, 60.9 per
cent of the annual target. Interest payments amounted to 510.8
million leva, 76.3 per cent of the annual projection.

The portion of Bulgaria's contribution to the EU budget, paid by
September 30 from the central-government budget, amounted to
700.3 million leva.

The CFP budget on a cash basis was in a deficit of 1,483.2
million leva as at September 2014, resulting from a national
budget deficit of 657.8 million leva and an EU funds deficit of
825.3 million leva.

Bulgaria's fiscal reserve amounted to 8,800 million leva as at
September 30, 2014. This includes 8,100 million leva deposited
with the Bulgarian National Bank (the central bank) and other
banks, and 700 million leva in receivables from EU funds for
certified expenditures, advance payments, etc. PK/DD


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