The government approved the first 2016 Quarterly Financial Report
05/03/2016
In the 86th meeting held on April 29, 2016, the Government of Kosovo approved the Quarterly Financial Report on the performance of revenues and expenditures for the period January 1 – March 31, 2016.
Revenue performance – Budget revenue (which includes tax and non-tax revenue) during the first quarter of 2016 totaled up to about 330 million euro which implies an increase by 16%, or 44.6 million euro more than the revenue collected during the first quarter of the previous year.
The revenue structure does not differ significantly from that of the previous period; the value added tax (VAT) has the highest share in the total budget revenue of the first quarter of this year amounting to 32.6% or 137.05 million euro. Compared to the revenue collected last year from VAT for the same period, there were 15% or 5.18 million euro more collected. In an analysis "Economic and Budgetary Effects of Fiscal Reforms in 2015", GAP Institute underlined that the change of the VAT threshold from 16% to 18% will increase the VAT revenue in the budget. Excise tax has the second largest participation in total revenue after VAT with a share of 19.44% or 81.71 million euro. If we compare the revenue collected from excise tax to the revenue collected for the same period last year, there were 30% or 18.65 million euro more collected.
Borrowing in the first quarter of 2016 has reached the amount of 69.46 million euro or 75% (29.69 million euro) more than the same period last year. Internal borrowing represents 46% of total borrowing. External borrowing during this period, according to the quarterly report, is mainly related to the disbursement of the second installment of the financial support stemming from meeting the criteria of the IMF Program.
Expenditure performance – Budget expenditures have increased by 42.39 million euro or 15% compared to the first quarter of 2015.
Of total expenditures, 41% or 135.73 million euro in wages and salaries, 30% or 99.09 million euro in subsidies and transfers, 10% or 34.21 million euro in goods and services, 15% or 51.08 million euro are capital investments, 2% or 6.39 million euro in utilities, and 2% or 6.6 million euro in interest payments on public debt. Expenditures for wages and salaries increased by 9.2 million euro or 7% during the first quarter compared to the same period last year. According to the quarterly budget report, the increased expenses for this category compared to 2015 are mainly a result of the implementation of the collective contract. Expenditure on goods and services for the first quarter of this year increased by 5.9 million euro or 21% compared to the same period last year. Referring to the quarterly report, the highest contributors of these expenditures are maintenance expenditures of fixed asset and the expenditures for purchasing goods and services.
Expenditures for subsidies and transfers indicate social transfers and subsidies, including subsidies in the agriculture sector. These expenditures represent an increase of 7% or 6.48 million euro compared to 2015.
Capital expenditures during the first quarter of 2016 reached a value of 51.1 million euro or 24% more revenue compared to the same period of 2015, which results in an increase of the cumulative value of capital expenditures by 60%. According to the quarterly budget report, the highest increase within this category was a result of road construction costs.
Expenditures for debt service (interest and equity payments) amounted to 24.6 million euro, marking an increase of 78% compared to the payments for this category of the same period of the previous year.
