Budget revenues HRK 43.5 billion, expenditures HRK 50.4 billion in first five month of 2010

Croatian state budget revenues totalled HRK 43.5 billion in the first five months of 2010, down 1.2 percent in comparison to the same period of 2009, while budget expenditures increased 2.2 percent to HRK 50.4 billion, resulting in a budget deficit of HRK 6.9 billion, Finance Ministry officials reported on Wednesday.

Budget revenues in the first five months of 2010 fell down by HRK 506.5 million as against the comparable period of 2009.

Revenues collected from Value Added Tax (VAT) rose by 2.4 percent to HRK 14.3 billion, while revenues from excise duties increased by 44.2 percent to HRK 3.8 billion.

The special crisis tax imposed on salaries last summer brought HRK 1.05 billion into the budget in the first five months of 2010.

Revenues from income tax were reduced by HRK 47 million.

Profit taxes went down by HRK 1.3 billion to HRK 3.3 billion.

Contributions brought HRK 15.7 billion into the budget, 4.9 percent (or HRK 805 million) less than in the first five months of 2009.

Budget expenditures totalled HRK 50.4 billion, an increase of HRK 1.1 billion. Expenditures on salaries went down by HRK 237.5 million to HRK 9.2 billion.

State subsidies were reduced by HRK 75.6 million to HRK 3.1 billion. For instance, state subsidies to shipyards and to the state railway company (HZ) were reduced, while grants to farmers increased.

Expenditures on pensions increased by HRK 435.5 million to HRK 14.6 billion.

Sources from the finance ministry said that the rise in pension expenditures mostly contributed to a rise in budgetary spending in the observed period.

Of the HRK 14.6 billion, HRK 7.8 billion was covered by pension contribution payments and an additional HRK 6.8 billion was ensured from the state budget.

The sources at the ministry described this as a structural problem burdening state finances.

A task force is likely to be set up soon to deal with this issue and with early retirement.

Ministry officials could not say when a revision of the state budget could be expected, explaining that estimates would be made and then forwarded to Prime Minister Jadranka Kosor. (EUR 1 = HRK 7.254425)

(HINA)

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