Schmögnerová admits 1999 budget targets shaky

Based on her analyses of the development of public finances in the first eight months of 1999, Finance Minister Brigita Schmögnerová forecast on October 11 that budget revenues would be 190.4 billion crowns at the end of the year.

The sum includes a 5.7 billion crown transfer from the National Bank of Slovakia (NBS) to repay the debt of the ailing IRB (Investment and Development Bank) and grants amounting to 8.7 billion crowns. After deduction of these sources, however, budget revenues fall almost four billion crowns short of the target for this year (179.9 billion crowns). Budgetary spending should be in compliance with the originally projected amount of 194.9 billion crowns, Schmögnerová said.

Schmögnerová warned that income estimates may be corrected downwards because of shortfalls caused by delays in the adoption of new laws, lower than expected revenues from the import surcharge, a shortfall in VAT collection as well as in non-tax revenues.

The ministry expected income from the import surcharge at 10.1 billion crowns. However, the exemption of some items from the list of imports subject to the surcharge should slash income to 7.2 billion crowns.

A July VAT increase should also bring in 1.5 billion crowns less than expected, as domestic consumption has sagged in response to the tax hike.

The 1999 budget targets are also endangered by profit levies from state companies that have been forgiven by the cabinet, as well as increased payouts on social benefits schemes.

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