This genre photo shows coins and banknotes of Russia.
Photo: Ivan Grankin
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Govt Had Too Many Revenues
The execution of federal budget is still ahead of the schedule. The spending is much higher than it used to be, while the pace of the revenues is truly skyrocketing. As a result of it, the surplus reached 9 percent of the GDP in January through April. This performance could be viewed as an extra ground for tax reduction, as stepping up the spending with today’s inflation of 14 percent to 15 percent could be dangerous.
January-April revenues of the federal budget reached 3.02 trillion rubles, or 37.5 percent of the annual forecast. The annual increase was 58 percent in nominal terms. The spending stood at 1.94 trillion rubles, or 26.2 percent of the annual target. The April revenues exceeded 1 trillion rubles and the spending was above 0.6 trillion rubles. Same as before, both the revenues and the spending are ahead of past years’ schedule, while the revenues also outpace the hypothetical steady schedule by 338 billion rubles.
The April surge in revenues could be attributed not only to the inflation and extremely high prices for crude oil. The VAT entered the budget in April first time after the shift to the quarterly payment of this tax. The exact figures are yet unknown, while the difference between the April collection and average collection of the first quarter was 448 billion rubles.
Despite all efforts of Finance Ministry, they haven’t managed yet to lay the foundation for avoiding the budget curtain and the surge in spending which repeats at the end of each year. The difference between the actual spending and the even one was 529 billion rubles as of May 1. The matter at stake is primarily the cash spending, i.e. the spending of money by departments, which are evidently unable to spend the appropriated budget funds in time.
Meanwhile, the budget surplus is growing. It equaled 1.08 trillion rubles, or 9 percent of GDP, in January through April with the April revenues exceeding the spending by 484 billion rubles. This amount could be viewed as another argument either for prompt reduction in taxes or for the increase in spending. Both Dmitry Medvedev and Vladimir Putin have backed up the first idea already.
www.kommersant.com
All the Article in Russian as of May 19, 2008
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