Bulgaria Back to Monthly Budget Deficit in May, FinMin Upbeat

Finance | June 3, 2010, Thursday // 16:37|  views

Bulgarian Finance Minister Djankov is increasingly upbeat about the prospects of improving state revenues. Photo by BGNES

Finance Minister Simeon Djankov expects a monthly budget deficit in May of BGN 75-80 M, after in April Bulgaria had a surplus for the first time in months.

Djankov explained at a news conference Thursday that final data placed Bulgaria’s monthly budget surplus in April at BGN 369 M.

He refuted criticism by the Socialist opposition that the one-time surplus was only the result of the annual contribution to the state budget of the Bulgarian National Bank, which amounted to BGN 354 M.

The Finance Minister pointed out that the state budget had envisaged a contribution of BGN 300 M from the BNB in April, which means that only the remaining BGN 54 M should be counted as contributing to the April surplus.

In his words, most of the surplus came from dividends that the state received from a number of companies, mostly in the energy sector.

Djankov interpreted the forecast May 2010 deficit of “only” about BGN 80 M as evidence the economic crisis was ending. He pointed out that in May 2009 Bulgaria registered a deficit of BGN 120 M.

According to the Finance Minister, if the preliminary estimates of the ministry are correct, Bulgaria will have a total budget deficit of BGN 1.37 B for the first five months of the year. This is still lower than the peak deficit of BGN 1.6 B for the first quarter.

He did express his hopes, however, that the monthly May deficit might end up being lower as preliminary figures usually indicated worse results than in reality.

The Minister explained the reemergence of a monthly deficit in May after the surplus in April with the fact that Bulgaria had to purchase additional shares from the Black Sea Bank, a transaction negotiated back in 2009, and with higher that usual payments on arrears.

“If we exclude these expenditures, we can safely say that we had a balanced monthly budget in May,” Djankov said.

He also revealed that on June 1, 2010, the government still owed BGN 237 M in VAT arrears to private companies, while a year ago the sum amounted to BGN 470 M; in January 2010, it was about BGN 500 M.

According to Djankov, May was the best month since the beginning of the year in terms of the revenues collected by the state.

Thus, in May, the Customs Agency collected 104.7% of the projected amount of money from alcohol excise tax, and about 100% of the fuel excise tax; overall, it raised 71.5% of the projected excise tax income, which was a better result than in any one of the previous months of the year.

The revenues from VAT on imported goods in May were BGN 237 M, 15.5% more than projected; income raised from customs duties was 14.8% more than planned.

“Income from VAT on imports and customs duties is on the rise, the one major problem is the revenue from cigarette excise, which is a common European problem,” Djankov said.

“We should be quiet and should be doing our jobs. This refers to everybody. Finally, the figures are starting to speak,” he declared.

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Tags: Simeon Djankov, finance minister, Customs Agency, VAT, revenues, budget deficit, surplus, excise tax, cigarette excise

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