The state budget deficit in the first five months was only 1.9 billion Kuna, while last year it was 5.4 billion
The government is in technical mode, but it has paved the way for their successors to a deficit even lower than last year – only 1.9 billion Kuna in the first five months, compared to 5.4 billion last year, Poslovni Dnevnik reported on July 21, 2016.
Scoundrels would say that the ruling coalition that fell apart has some advantages as it is incapable even to make decision to increase spending. However, decline in deficit is firstly due to better budget income, meaning conservative planning and foresight of the Finance Ministry. The government planned for a 1.3% increase in tax revenue, when in reality it turned out to be 8%.
By the end of May a total of 28.45 billion Kuna was collected, 2.3 billion more than last year. Unofficially, June tax revenue is also up 8%. It must be said this increase comes despite the VAT income slightly below expectations, a major tax income. Some economists will say that deflation does not benefit VAT, but it seems that there is a fall in discipline and a rise in evasion of the fiscalisation system.
Unlike VAT, excise duty brought in 1.3 billion Kuna more, a 22% increase. For the entire year the government planned to collect 14 billion Kuna from excise duty, 4.3% more. An increase has been documented in the collection of income tax as well. While last year a total of 3.4 billion was collected, by the end of June this year the budget saw 4.2 billion from this source. The plan for the entire year is at 6 billion Kuna.
