The CBRT effect on the budget deficit


The Ministry of Treasury and Finance announced the first results for the budget for this year. The budget deficit increased to TRY 24.15bn in January this year compared to TRY 21.5bn budget surplus last year. The surplus had resulted from the early transfer of Central Bank’s (CBRT) operating income to the budget. The CBRT had transferred its TRY 40.5bn of profits to the budget, resulting in a budget surplus in January 2020. This year, however, there had not been a transfer yet.

In January 2021, the central government budget expenditures were TRY 113.8bn, budget revenues were TRY 89.6bn and the budget deficit was TRY 24.2bn. Meanwhile, the primary budget expenditures were TRY 91.8bn and the primary budget deficit was TRY 2.2bn. Tax revenues increased by 17.5% in January compared to the same period last year, reaching TRY 79.2bn.

Motor vehicle tax increases by TRY 2.5bn

The increase in Special Consumption Tax (SCT) stands out in the budget results. SCT revenue, which stood at TRY 12.9bn last year, rose to TRY 16.1bn this year. The most striking increase was observed in the Motor Vehicle Tax. The Motor Vehicle Tax revenues, which were TRY 874.7m last year, jumped to TRY 3.4bn this year, showing a TRY 2.5bn increase. Citizens’ demand for motor vehicles remained intact. The second-highest tax hike was observed in durable consumer goods. The SCT on durable consumer goods reached TRY 1.5bn with an increase of TRY 501.1m. There has been an increase of TRY 381.4m in tax revenues from tobacco products with tax adjustments, totalling TRY 5.3bn.

Valuable housing tax in the budget

This year, the valuable housing tax was included in the budget for the first time. Even though the revenues were counted as “0”, the Valuable Housing Tax was included in the central government budget table as a budget revenue item.

On another note, while there was a primary surplus of TRY 34.2bn in January last year, a primary deficit of TRY 2.2bn was observed in January 2021. Ex-interest budget expenditures rose to TRY 91.8bn with a 4.4% increase compared to the same month last year. Employment expenditures increased by 12.2% since the same month last year, reaching TRY 32.7bn while expenditures for the state’s contributions on social security institutions increased by 11.4%, reaching TRY 5.4bn. While there was TRY 2.5bn of capital expenditures, no capital transfers were realized in January. Lending expenditures were TRY 2.7bn and the interest expenses were recorded as TRY 21.9bn with a 72.2% increase compared to the same month last year.

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