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Budget revision draft: Consolidated budget deficit to be increased by 2.649 billion RON
The revenues of the general consolidated budget will increase, on balance, by 29.941 billion RON, spending by 32.591 billion RON, while the consolidated general budget deficit on a cash basis will increase by 2.649 billions RON according to the draft Ordinance on the state budget revision for 2022, published on Thursday on the website of the Ministry of Finance.
The 2022 state budget revenues will increase, on balance, by 21.493 billion RON, while 2021 spending will increase by 26.447 billion RON.
According to the Explanatory Memorandum, the influences are mainly reflected in several categories of income, namely profit tax (+4.018 billion lei), other taxes on profit, income and capital gains from individuals (+126 million RON), Value added tax (+5.541 billion RON, of which 2.069 billion RON amounts broken down from the value added tax to finance local budget expenditures), excise taxes (-1.97 billion RON).
"The decrease in excise duties collected in H1 2022 is mitigated by the positive effect of the measure to increase the level of excise duties on tobacco products (cigarettes, heated tobacco and liquids with nicotine content intended for inhalation with the help of an electronic device) and alcohol (G.O. no. . 16/2022)," says the relevant ministry.
Moreover, the increase in state budget revenues will be driven by other general taxes and duties on goods and services (+11,300 billion RON, as a result of the evolution of the revenues obtained from the deregulation of prices in the natural gas sector, of +8.1 billion lei, and the tax applied on the additional income made by electricity producers in accordance with Law no. 259/2021 - of +3.2 billion RON).
At the same time, the taxes on the use of goods, the authorization of the use of goods or on the development of activities will have an increase of 920.4 million lei, influenced by the evolution of gambling tax revenues and the maintenance of the estimates in Law no. 317/2021 on the receipt in 2022 of the revenues related to the exploitation of radio frequencies in the new frequency bands harmonized at the European level for 5G land mobile broadband communication systems.
According to the cited source, the revenues from the tax on foreign trade and international transactions will increase by 447 million RON, while non-tax revenues will amount to +2.465 billion RON.
"The increase in non-tax revenues by 2.7 billion RON is mainly due to the evolution of oil royalties (as a result of the increase in oil and natural gas prices) and the dividend payments related to the financial year 2019 and 2020 made by CEC Bank. This increase in revenues is mitigated with 0.7 billion RON by the fuel compensation to support the granting of price reductions for gasoline and diesel (OG. No. 106/2022)," reads the document.
At the same time, the increase in state budget revenues is mainly influenced by the evolution of macroeconomic indicators for 2022, in which the nominal GDP growth rate was revised upward to 16.1%, of state budget receipts, of the latest legislative amendments approved to take effect in the current year, of the revenues related to the amounts provided for by judicial decisions with the object of granting certain salary rights established in favour of the staff, which have become enforceable (0.6 billion RON), as well as the expected measures to improve the collection of duties and taxes (the target of 3.5 billion RON, of which 1 billion RON for VAT, 1 billion RON for excise duties and 1 billion RON for insurance contributions).
As regards the state budget expenditures, expected to increase, on balance, by 26.447 billion RON, the draft Ordinance on the 2022 budget revision states that the influences will be, as follows: personnel spending increased by 1.623 billion RON, expenditure on goods and services (-532 million RON), interest expenditure (+3.999 billion RON), expenditure on subsidies (+2.819 billion RON), transfers between public administration units (+2.559 billion RON), other transfers (+2.700 billion RON), projects with financing from non-reimbursable external funds post-accession (+70 million RON), social assistance spending (+7.893 billion RON), projects with financing from non-reimbursable external funds related to the financial framework 2014-2020 (+1.659 billion RON), other expenditures (+461.3 million RON), projects financed from the amounts representing the non-refundable financial assistance related to PNRR (+34.8 million RON), projects with financing from the amounts related to the loan component of PNRR (1.820 billion RON), Reserve Funds (one billion RON), spending related to programs with reimbursable financing (-67.4 million RON), capital expenditures (+194.4 million RON) and granted loans (+200 million RON).