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Decrease In Income Remains

The results of the Central Government’s accounts show a reduction in income of 8.4% in the first eight months of this year, in relation to the same period last year.

According to figures from the Ministry of Finance, the total spending grew 21.7%, motivated mostly by the increase in income, due to the different adjustments that have been made over the year, and from the transfers from the Superior Education Fund (FEES for it’s initials in Spanish). The income reflects an accumulated growth of 32.1% up till the month of August in comparison to the same period in 2008. Also, the item “other spending” increased a 15.2% and the resources destined to pension payments increased 18.1% in the first 8 months of 2009 in comparison to the same period in the year 2008.

The resources destined to financing of the FEES grew 39.4% in this period, in comparison to the total as of August of last year, increasing the growth of the rest of the spending items, as well as the growth forecasts of the gross domestic product for 2009, even for the original forecasts of growth at the moment of generating the budget forecasts.

About the behavior of the main income ítems, it can be called out that what was charged regarding items of “other tax income”, grew 5.2%, while what was collected from sales tax (internal) grew by 1.4% and what was collected by consumer tax (internal) grew by 7.7%. In contrast, the income regarding income tax decreased by 6% and what was collected by customs was reduced by 21% up to the month of August of 2009, in comparison with the same period in 2008.

As it has been pointed out beforehand, the main cause in the decrease of collection is the fall in imports and consequently the loss of tax income for this same reason. The Ministry of Finance, Jenny Phillips, pointed out that “if by the accumulated amount that is shown up to the month of August, the income from customs would have been the same as in the year 2008, the total fall in collecting income would have been just about 0.4%. It is vital for the recovery of said income, that the economic activity be more dynamic and that these dynamics reach the consumer level and importing of goods from the exterior. The Government has been worried about implementing a spending policy that stimulates economic activity, by the increase in social spending and public investment, and avoiding in this manner a greater decrease in production.

The heirarch of Finance reiterated her call to the members of congress for the quick approval of the project that would allow temporarily financing regular spending with dept, fundamental for coping with the effects of the financial crisis of the Government’s spending and avoid a fiscal closure with further complications. Also, she pointed out that the importance that this needed to be approved in parallel with the proposal of a special budget sent to the Legislative Assembly, or there will be problems financing some of the running costs in the last months of the year.