The Tax Council is harshly criticising the budgetary adjustmentdraft maintaining that tax revenues may have been overestimated byas much as 0.5% in GDP, so that reaching the budgetary gap targetof 6.8% in GDP set for this year "carries significant risks".
This is the first time that a budgetary adjustment has beenanalysed and assessed by independent specialists. Owing to theexistence of the Tax Council, information to which the public hasnot had access so far has been disclosed.
The Council considers that the execution of revenues and expensesfor the first six months obviously points to a way too bullishassessment against effective achievements, which is not accountedfor only through the weaker-than-expected performance of realeconomy, but also reveals the rising tax evasion, particularlyobvious in case of excise duties.
Though major revenue and expense revisions are operated through thebudgetary adjustment, these are not accompanied by explanatorynotes. To that end, the Council recommends boosting thetransparency of the budgetary process.
The trend forecast by the Finance Ministry is not entirelyconsistent with macroeconomic projections for second half involvingdeeper economic contraction and the negative impact over incomes ofsalary cuts and layoffs, says the Tax Council.
As for budgetary expenditures, the Council considers revisedprojections as largely realistic.
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