Turkey: The budget gives a surplus in February with the increase in tax revenues

According to the February budget data announced by the Ministry of Treasury and Finance; The budget balance, which had a deficit of 24.2 billion TRY in January 2021, gave a surplus of 23.2 billion TRY in February 2021.

According to the February budget data announced by the Ministry of Treasury and Finance; The budget balance, which had a deficit of 24.2 billion TRY in January 2021, gave a surplus of 23.2 billion TRY in February 2021. The budget had a deficit of 7.4 billion TRY in the same period last year. As stated in the Monthly Budget Realization Report, the primary surplus, which was 6.8 billion TRY in February 2020, was 35.2 billion TRY primary surplus in February 2021. Budget revenues increased by 38.8% between February 2020 and February 2021 to TRY 119.6 billion, while budget expenditures increased by 3.1% to TRY 96.4 billion in the same period. In the similar period, tax revenues increased by 37.2% with the effect of 44.5% increase in corporate tax revenues, which increased from 25.6 billion TRY to 37 billion TRY compared to the same month of the previous year and reached 98.4 billion TRY. Tax revenues increased strongly in February due to the increase in direct taxes and indirect consumption taxes (VAT, SCT). Non-interest budget expenditures increased by 5.4% and reached 83.7 billion TRY.

 

When we look at the 2021 cumulative data; In the January - February period, it was seen that the budget had a deficit of 984 million TRY. It is seen that the budget, which gave a surplus of 14.1 billion TRY in the 2-month period of the previous year, displayed a more negative image compared to the previous year. While 41 billion TRY primary surplus was made in January - February 2020, 33.7 billion TRY primary surplus was realized this year. Budget revenues increased by 0.4% to TRY 209.2 billion between January - February 2020 and January - February 2021, while budget expenditures increased by 8.2% to TRY 210.2 billion in the same period. In the same period, the increase in tax revenues was realized as 27.7% and reached 177.7 billion TRY. Non-interest budget expenditures increased by 4.9% to TRY 175.5 billion.

 

Although budget expenditures continue to increase due to the pandemic, we can expect the spending effect to decrease with the reduction of incentives towards the summer. On the other hand, within the framework of the economic reform package, tightening measures in public finance will hold an important place in terms of controlling budget expenditures for more normal periods. For fiscal discipline, a tightening effect similar to monetary policies can be effective in meeting budget targets. On the other hand, with the high collection rate of debt restructuring and the increase in consumption, we see an increase in both direct taxes and indirect taxes. The strong increase rate in corporate tax is also a positive development in terms of the increase effect on the income of companies. The strong increase in tax revenues was effective in the budget's surplus in February.

 

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