Budget deficit soars as tax revenues drop
Posted by meb at February 12th, 2009
Marking a bad start to 2009, the Turkish budget deficit continued to widen in January amid prospects of a slowing economy and a weakening of the tax base.
The central budget of the Turkish Republic ran a TL 2.9 billion deficit in the first month of the year, and considering that the deficit was only YTL 524 million in the same month a year ago, the deficit has jumped 465.8 percent.
The Turkish Finance Ministry released its budget figures in a statement yesterday, stating that expenditures had reached TL 18.7 billion, whereas revenues remained at only TL 15.8 billion. In addition, the primary surplus, which is the amount remaining after interest payments are deducted from the total fiscal deficit, was TL 816 million.
The ministry envisages total expenditures of TL 259.1 billion before the end of 2009. That means that 7.3 percent of the total money earmarked for this year was spent in January.
Among the expenditures, money transferred to personnel as wages and other benefits increased by 16.6 percent over January 2008. In the same month, the state paid TL 5.6 billion to civil servants, 9.9 percent of the amount it had planned for the whole year — TL 57.2 billion. The increase stemmed from recent bonuses given to state personnel.
The amount the state pays for its workers and civil servants to social security institutions rose by 11 percent to reach TL 691 million. A total of 9.5 percent of the TL 7.2 billion which was allocated for social security payments for 2009 was spent in the first month.
Health expenditures, on the other hand, dropped in January compared to the same month of 2008. Last year, the state spent YTL 699 million to cover health needs. This amount decreased to TL 542 million in January of this year. TL 93 million went to pay the treatment and medicine expenditures of state personnel and TL 499 million to cover treatment and medicine of holders of “green cards.” Green cards are issued by the state allowing very poor people to access health services for free.
The current transfer payments increased by 39.5 percent to TL 7.1 billion.
Slight increase in revenues
The budget revenues edged up slightly in January by 0.3 percent over the same month of the previous year. In closer detail, income tax revenues increased in this month by 10.8 percent, corporate tax revenues by 15 percent and the amount collected by the banking and insurance transactions tax rose by 30.1 percent. Against these increases, the state was able to collect less from the value-added tax (KDV) placed on imports, an amount which decreased by 30.2 percent. Similarly, KDV collected on domestic goods was down 5.5 percent, private consumption tax (ÖTV) by 5.3 percent and fees, duties and charges, collected by the state to provide for nonessential services, such as the issuing of passports, fell 7.7 percent.
In its statement to disclose the figures, the ministry blamed the effects of the global economic crisis on the domestic economy, saying: “The reflections of the developments in the country’s economy on the overall budget will be closely tracked. Timely measures to ensure the continuation of fiscal discipline will be taken.”
source: Today’s Zaman
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