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The 2024 budget is revealed. How much does the government expect to collect additional revenue and how will it provide it? What is the risk of PPPs?

2023-11-01 09:21:21Biznes SHKRUAR NGA REDAKSIA VOX

The 2024 budget is revealed. How much does the government expect to collect

The discussion of these days on the economic level and which is an important point for the year 2024, remains the draft budget drawn up by the Albanian government. How will it provide income? Who will be the fiscal facilities and is this budget in the right expectations for Albanian citizens? In the budget relation, it is said YES. But is it risky and how is it at risk of being resold during the next year? Do PPPs remain the "hot potato of the budget"?

Let's look at the voices in turn. What does it expect to provide at the box office and where is the budget at risk?

In 2024, 674.7 billion ALL is expected to be collected in the state budget, according to the draft budget report.

Compared to the expectation of 2023, total budget revenues increase by +19.5 billion ALL, while tax revenues from taxes, customs and contributions, without taking into consideration the one-off revenues of 2023, are programmed to increase by +8.25% or +45 billion ALL.

According to finance, Tax and customs revenues, including insurance contributions, are projected based on the analysis of their multi-year historical trend, the expected realization in 2023 and the factoring of all the elements that will affect the revenues of 2024, including the effects from: economic growth, price index, new fiscal policies, as well as additional income from good administration. This forecast has been analyzed and corrected with the possible effects of other relevant factors, including the coefficient of elasticity, the typology of each type of tax, etc.

Factors that have been taken into consideration that affect revenue growth for 2024 include:

From the Fiscal Package 2024, with proposals that generate additional income in the Excise, Tax on Income from Professions as well as national Taxes, it is expected to collect 7 billion lek more, or 65 million euros.

The income that will be generated in the form of salary income and contributions as a result of the implementation by the Government of the reform in the field of salaries, where in 2024 the main part of this reform will be executed, through the planned fund from the budget of 29 billion lek for increasing the salaries of doctors, nurses, teachers, policemen, soldiers, and middle and lower levels of central and local administration.

Additional income from the salary reform is estimated at 12 billion ALL.

In the macroeconomic framework for the year 2024, where the growth of the Gross Domestic Product of 3.8%, and the price index of 3% is predicted. These indicators have been analyzed to have effects in an integrated manner with other factors for each tax in particular, related to historical data and price projections in international markets for ad valorem taxes such as Value Added Tax, Mining Rent and Tax Customs. Factors related to the expected average exchange rate EUR/ALL and USD/ALL are included in the projection, as well as the estimated stock exchange prices for minerals, oil by-products, etc.

15 billion additional income is expected from the economic growth and 4 billion from the price increase.

The projected revenues that will be generated from the improvement in the administration of taxes, duties and contribution obligations, steps which are also foreseen in the framework of the drafting of the Mid-Term Revenue Strategy. Additional income from the improvement in administration will be ALL 7.5 billion.

What does the budget foresee as a risk from PPPs ?

The Ministry of Finance and Economy evaluates and approves in advance all concessionary and public private partnership (PPP) projects as well as any changes thereof, from the point of view of individual or group implications for budget expenditures, budget deficit, sustainability of public debt and contingent liabilities eventual.

The total amount of annual net payments made by general government units, which result from concession contracts or public private partnership (PPP), as a rule, should not exceed the limit of 5 percent of the actual tax revenue of the previous budget year .

In case of exceeding this limit, the Council of Ministers takes corrective measures on the side of budget revenues, necessary and sufficient to return within the allowed limit, during the next two budget years. Currently, 11 concession contracts or public private partnerships (PPP) are active.

EXPENCES

Total public expenditures for 2024 are programmed at the level of 735.9 billion ALL or 30.2% of GDP.

According to the report, Public Investments for 2024 are planned at 5.3% of GDP or 128.5 billion ALL (including the reconstruction fund in the amount of 7 billion ALL).

In the investment planning for the year 2024, all contractual obligations for investment projects with foreign and domestic financing have been taken into consideration, and priority will be given to the financing of ongoing projects.

The budget deficit for 2024 is planned to be at the level of 2.5% of GDP from about 2.2% expected for 2023.


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