ECONOMY

Budget revenues continue to lag

Despite the slight improvement in budget revenues in the first four months of the year, there is still a considerable shortfall that exceeds 1.2 billion euros, according to preliminary data compiled by the Finance Ministry.

Unofficial figures show that revenues in April posted a 3 percent increase and reached 3.95 billion euros against 3.84 billion euros in the same month last year. However, the overall picture of public revenues remains problematic and particularly worrying, and as a result the ministry has been avoiding all expenditures such as grants to state corporations as well as putting off payments to its suppliers.

Preliminary data indicate that in the year to April the public coffers had an inflow of 15.08 billion euros against the ministry?s target of 16.39 billion euros.

Compared with the first four months of last year, revenues in 2011 have posted a 5.3 percent decrease. The budget had provided for a yearly increase of 8.5 percent instead, compared with revenues from the January-April period in 2010.

The main reasons that the state saw its revenues lagging significantly in the above period are to be found in reduced income tax, overoptimistic expectations from taxation, and delays in licensing games of chance and the revamping of the mechanism against tax evasion.

The budget had provided for revenues from taxing corporations? income to the amount of 2.8 billion euros. Now the ministry is expecting at least 1 billion euros less owing to the losses or smaller profits of companies in 2010. The plan was also for revenues from taxpayers? income to reach 10.6 billion euros, but again, the ministry now sees the target has been missed by more than 1 billion euros.

The licenses for games of chances that were to be issued this year have been postponed until 2012 as the relevant law was delayed and not sent to the European Commission in time.

What is more, the restructuring of the mechanism to combat tax evasion was also delayed, reducing the chances of reaching the target set for retrieved revenues that the ministry had set at 1.6 billion euros this year.