The growth of expenses projected in Lithuania’s 2015 budget bill contravenes the Law on Fiscal Discipline and the expected growth of tax revenue is overly optimistic, the National Audit Office said in conclusions published on Monday.

In addition, the supreme national audit institution pointed out that the explanatory memorandum of the bill and its accompanying documents were insufficiently detailed and did not provide full information that should be disclosed in accordance with the Law on Budgeting.

According to the Audit Office, the Law on Fiscal Discipline would only allow the 4.8 percent growth in appropriations, as outlined in the bill, if the government deficit were to be reduced by 1 percentage point.

As a result of methodological changes, the government sector includes the Deposit Insurance Fund from this year. Therefore, the government deficit should reach 1.3 percent of GDP this year before going down to 1.2 percent in 2015.

“The figure representing the balance of the government sector is projected to improve by just 0.1 percentage point of GDP. Therefore, in line with the Law on Fiscal Discipline, the growth of budget appropriations in 2015 had to be capped and the appropriations should not increase as compared with the amount planned for 2014,” the conclusions read.

Meanwhile, the budget bill drafted by the government excludes the Deposit Insurance Fund from the deficit to GDP ratio so as to improve the deficit figure. As a result, the government expects the deficit to reach 2.6 percent of GDP this year before falling to 1.4 percent next year.

According to the Audit Office, forecasts relating to the growth of revenue from VAT, income and profit taxes, as anticipated in the 2015 budget bill, are overly optimistic. In addition, the forecast relating to the growth of revenue from excise duties is not cautious enough.

The audit institution believes that the revenue from dividend would depend both on the performance of state-owned enterprises and on the government’s decisions.

According to the budget bill, consolidated revenue of the central government and local governments (including nearly 2.3 billion euros in EU and other international aid) will come close to 9.2 billion euros in 2015, which is 5.9 percent above the revenue target set for 2014.

The central government budget revenue, including EU and other international aid, is projected to grow by 5 percent, as compared to this year’s target, to 7.957 billion euros.

Consolidated budget expenditure, including EU support funds, are planned to reach 9.558 billion euros, including 8.299 billion euros in central government budget expenditure.

The central government deficit, as measured on a cash basis, should reach some 342.4 million euros next year.

BNS
Naujienų agentūros BNS informaciją skelbti, cituoti ar kitaip atgaminti visuomenės informavimo priemonėse bei interneto tinklalapiuose be raštiško UAB "BNS" sutikimo neleidžiama.

Lithuanian laser professionals at world's largest laser photonics exhibition

On June 24-27 Lithuanian laser manufacturers will present their latest technologies in the most...

Opinion. Public procurement: which law amendments are significant and which are merely formal?

Every time, amendments of public procurement legislation attract a lot of attention, however, it...

Klaipeda introduced high schools’ students to the future of engineering

Last week Klaipėda city development agency " Klaipėda ID " for the second year in a row organized...

Minister: chief forest officer stays for now

Marius Pulkauninkas , chief forest officer of the State Forestry Enterprise of Lithuania, is staying...

Lithuanian and Polish operators ask for EU support for submarine cable

Lithuanian and Polish power transmissio n companies Litgrid and PSE have asked the EU for financial...