ECONOMY

Initial data for April encouraging

The initial signs for the budget revenues collected in the month of April are positive, according to Finance Ministry sources. Revenues for April beat the 9.7 percent target set in the Growth and Stability Plan for 2010. Value-added tax for the first quarter of the year is payable by the end of April and is expected to be considerably higher than last year. A spike in value-added taxes has helped to improve the health of the budget after recent reforms voted in by Parliament require taxpayers to qualify for a tax-free threshold by providing proof of their living expenses. Apart from revenues improving due to consumers chasing down register receipts, the increase is also attributed to higher levies on cigarettes, petrol and fuel. On the cost side, there are savings due to cuts in public sector allowances and salaries. The reduction in the bonus paid for the Easter holiday saved the government some 500 million euros, helping to put some smiles on the faces of officials at the Finance Ministry. However, this joy could be short-lived, because the improved fiscal situation is mostly due to technical maneuvers. In a bid to stock up on cash, the ministry has frozen the return of value-added tax to exporters and cut public investments by a massive 38 percent. Meanwhile, sources said that the ministry is likely to move ahead with changes to top-level staff at tax offices by the end of May to improve the efficiency of revenue collection services.