SPECULUM VERUM
– Agency “Customs” will collect 1.5 billion. BGN. less than VAT, customs and excise duties this year compared to last year. This was reported by the head of the agency Pavel Gerenski to the deputies of the budget committee. He was invited to present the performance of the revenues to date and the expectations for the end of the year.
The expected receipts for this year from VAT on imports, duties and shares are for 11,9 billion. BGN, while the record ones were reported for last year 13,4 billion. BGN.
The main reason for lower customs revenues is an expected decrease in imports and consumption by businesses and the population, due to difficult supplies due to the war in Ukraine and reduced purchasing power, explained Gerensky. Another reason is the significant drop in crude oil imports from “Lukoil Neftokhim”, which is a major feather in VAT collections from customs.
Gerensky reported what revenue was collected in each of the first four months of the year. In general, they are with 150 million. BGN. more than last year, but this is solely due to sudden restocking of tobacco products due to the raising of excise duties from 1 March. During this restocking, the tobacco companies have paid advance excise duty at the old rates. These quantities of cigarettes will be sold until sold out, which customs expect to be done by the middle of the year. Until the end of 2023 G. however, the higher excise tax on cigarettes will also bring more revenue to the budget. AM's calculations show, however, that the improvement in excise revenue this year will be only s 14 million. BGN, which is well below the expected effect of the Ministry of Finance.
Revenues from VAT on imports for the first four months is c 641 million. BGN. or 10% less than last year. The drop in the import of crude oil for the Burgas refinery is with 223 million. kg or 11% as a quantity, but in value terms the contraction is with 43%, pointed out the head of the AM. There is also no import of fuel oil.
“Not only “Lukoil”, but other companies from the oil industry also have reduced imports of oil products such as diesel fuel. All serious players in this sector are finding it difficult to secure imports”, Gerensky said. The import of metals also decreases, which also negatively affects VAT revenues. The reasons are a decline in the consumption of industrial goods, as well as sanctions against Russia and counter-sanctions by Russia, which stop exports to Ukraine.
Customs revenue also declined in the first four months – they are with 17% or 70 million. BGN. less than last year, but AM expects this decline to be caught up by the end of the year.
Reserves
It became clear from the answers of the head of customs to the deputies of the budget committee, that there are reserves for revenue growth, mostly in the tightening of controls against smuggling, but this cannot be expected to significantly change the picture.
AM will propose that an excise tax be introduced for electronic hookahs as well, as well as for e-cigarette liquids without nicotine content. Checks have established, that there is actually nicotine in these liquids, and in some even drugs were found, which is both punishable and harmful to health.
Gerenski also informed about a meeting with representatives of “Lukoil” These days, which are making moves to begin importing oil from Kazakhstan this year. “It is more expensive than the Russian one, and if the refinery manages to start working with such oil, this will also lead to an increase in VAT revenues”, Gerensky said.
He explained, that customs revenues from the import of goods to date are below the forecasts of the Ministry of Finance, laid down in the draft budget for 2023 G., as the gap is close 700 million. BGN.
This alarmed the MPs, who requested the detailed customs report on VAT revenue, excise and customs to be presented to them, to get to know him in more detail. In the report, as it became clear, also contains confidential information, which cannot be made public.
“I come away more pessimistic about the state's finances after this hearing”, said BSP MP Rumen Gechev. According to Petar Chobanov from DPS, what he heard is worrying for the prospect of our country achieving expectations from the Ministry of Finance 1.8% economic growth this year. “We have to take action, to prevent a downturn in the economy”, Chobanov said.