23rd June 2021, Skopje – Solid tax collection in the Budget from the beginning of the year, provided for allocating additional funds for measures aimed at supporting the economy and the capital investments. Since the start of the year until 21st June, total revenues have been higher by 14.5% compared to last year, being a result of the solid tax and contribution collection, Minister of Finance, Fatmir Besimi said at the panel discussion “Economic Recovery of the Republic of North Macedonia” at Skopje Economic Forum.
– By taking into account the available most recent data on the collection of duties in the Budget, i.e. since the start of the year until 21st June, total revenues have been higher by 14.5%, with tax revenues and contributions being higher by 19.3% and 5.8%, respectively. Although, the comparison base last year also includes months when the revenue collection was under the strong effect of the COVID-19-induced crisis, tax collection in the Budget has been solid until mid-March – during the period not affected by the crisis. Budget is in good condition. Expenditures are executed in a timely manner and on regular basis, whereby some liabilities are paid even before the due term, to the end of protecting certain categories of citizens, as is the case with the early payment of pensions – Besimi said.
Minister of Finance underlined that under the Supplementary Budget, improved collection of duties in the Budget, will be geared towards the needs for implementing measures aimed at coping with the crisis, being also focused on the subsidies and the growth of capital investments.
– Capital expenditures are projected at Denar 30.5 billion or by Denar 6.5 billion higher compared to the 2021 projections. Under these modifications and amendments to the 2021 Budget, expenditures have been redesigned, with higher share of capital expenditures in the total ones, i.e. increasing from the initially projected 9.4% to 11.3%, being higher than the average over the last ten years (9.5%). Growth was a result of the increase in loans with 0% interest, made available through the Development Bank geared towards the most severely hit sectors in the field of tourism, craftsmanship, hospitality industry, transport, event planning industry, private health institutions, as well as the state loan guarantee and the establishment of Fund for Development and Research. Moreover, additional funds are being provided at budget users, intended for reconstruction of public health institution, capital investments in the field of child care and social affairs, road infrastructure, additional funds for social flats, being coupled by higher funds aimed at rural development – Besimi said.
Minister of Finance representatives pointed out that the economic recovery will be followed by gradual fiscal decentralization policies, for the purpose of maintaining the debt stability. He said that this will be done by improving the budget revenue collection (by enhancing the capacities and improving the services of PRO and the Customs Administration, via measures aimed at reducing the grey economy, preventing and combatting corruption, etc.), reducing and restructuring budget expenditures (by cutting non-priority and non-essential costs, reducing the current expenditures, greater support to the private sector, innovations and boosted competitiveness, high allocations for social protection and revision of methodologies for transfers and subsidies, etc.) and changes in the sources of financing the budget deficit (Growth Acceleration Financing Plan).
Minister Besimi stressed that the purpose of the Growth Acceleration Financing Plan is to scale up the total investments in the economy, thereby staying on the set path to reduce the fiscal deficit in the medium term. Moreover, intensification of economic growth in the medium term will also provide for stabilizing the debt due to the expanded fiscal room required for its servicing.
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