The state expects lower public revenues in the coming years, when measured in relation to the gross domestic product.
It is expected that they will make 41.8 percent of GDP this year, and at the end of 2024 – 40.6 percent. At the same time, GDP is projected to grow, by six percent this year and four percent next three years.
As can be seen from the Fiscal Strategy, the biggest drop is expected from taxes – 0.7 percent. Authorities believe that only the income from the corporate income tax will increase. With the current 1.8 percent of GDP, this levy could reach 2.1 percent. On the other hand, excises will fall from 5.4 to 4.9 percent of GDP.
The Fiscal Council also believes that the medium-term projections of public revenues generally correspond to the expected macroeconomic trends.
– Approximately half of this reduction is a consequence of the return of tax revenues to structural levels after the economic crisis – the Fiscal Council estimates.
– Namely, higher revenue collection is expected this year due to transferred tax liabilities, by about 0.6 percent of GDP, while, on the other hand, due to the decline in economic activity, the profit tax is expected to be lower than usual this year. The second part of the reduction in tax revenues is the result of expected macroeconomic trends, slower growth of private consumption, stable consumption of petroleum products, reduction of revenues from excises, VAT and other tax revenues.
Projections of income tax and contribution revenues assume faster growth of the wage bill than GDP, which, given the existing trends in the labor market, is most likely achievable, the Fiscal Council estimates. After the medium-term fiscal projections are adjusted for one-time collections of transferred tax liabilities from 2020, the Ministry predicts a year-on-year growth of the wage bill by an average of about eight percent in the next three years.
Excise duties are also expected to reduce their share in GDP by about half a percent. It is borne in mind that the market for tobacco products is shrinking by about three percent a year, although levies on them are growing.
– Unlike tobacco products, the situation on the market of petroleum products is much less changeable – the strategy states.
– Better control and labeling effects of petroleum products have reduced the possibility and cost-effectiveness of illegal activities. In the coming years, due to caution, the growth of consumption of petroleum products is not expected to continue, although it can be expected that the acceleration of economic activity will contribute to the growth of consumption.
The authorities expect the share of non-tax revenues to fall – from 4.6 percent in 2020 to 3.5 percent in 2024. All income that is not considered permanent is excluded from the database. This primarily refers to one-time, to some extent uncertain revenues – extraordinary payments of profits of public companies and agencies, dividends, revenues based on collected receivables,etc., Novosti reports.
