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Bank Gospodarstwa KrajowegoPoland faces risk of VAT revenue non-execution according to 2024 draft budget update (opinion)
Poland's state budget data for October point to the risk of a slight VAT revenue non-execution, even according to the draft update of 2024 budget, Polish state development bank BGK economists assessed in a Monday's report.
BGK's experts recalled that in October, the increase in the deficit was the result of faster growth in expenditure, which was PLN 12.4 billion (EUR 2.9 bln) over revenue at PLN 8.5 billion (EUR 1.9 bln).
"This has been a theme present throughout the last year. The cost of servicing treasury debt is responsible for part of this increase," the economists pointed out.
"In liquid year terms, this cost has risen to PLN 67.6 billion, which is already equivalent to 1.9 percent of GDP. Coincidentally, state budget spending as a percentage of GDP rises to almost the highest level ever (22.6 percent vs. 23.0 percent of GDP)," they added.
The authors of the cited report also recalled that on the revenue side, after de-seasoning, they see stagnation or only token growth in the main revenue sources (PIT, CIT, excise duties, VAT).
"We see a risk that VAT revenues will fall short of the scale assumed not only in the original budget bill (PLN 312.6 billion), but also in its amendment (PLN 293.5 billion), but not by much. Up to and including October, the ministry managed to collect PLN 243.6 billion on this account," they wrote.
The budget deficit after October was PLN 129.788 billion (EUR 30.05 bln), or 70.5 percent of the plan for 2024 according to the budget law before the update.
The lower house of Poland's parliament - Sejm is proceeding with an amendment to the budget for the current year, which envisages an increase in the maximum deficit to PLN 240.3 billion (EUR 55.6 bln) from PLN 184 billion (EUR 42.6 bln).
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