Ministry confirms January cashflow gen govt deficit at 0.3% of full-year target

Hungary had a cashflow-based general government deficit, excluding local councils, of HUF 2.5 billion in January, or 0.3% of the HUF 841.8 billion full-year target, the National Economy Ministry said in a second reading on Thursday. The figure is unchanged from a first reading released on February 7. The deficit compares to a surplus of HUF 107.3 billion in January 2012. The ministry attributed the difference "to regulatory changes affecting VAT revenues and the trend of ministries' revenue and expenditure related to EU programs". It also noted that the inflow of revenue within the year will greatly differ in 2013 from 2012 due to the significant changes in some type of taxes. Within the central government, the central budget had a HUF 90.7 billion deficit in January, 10.9% of its HUF 834.5 billion full-year target. A year ago, the central budget had a surplus of HUF 85.3 billion. The two social insurance funds posted a surplus of HUF 50.9 billion in January. They are targeted to breake even in 2013. In January last year, they had a surplus ofHUF 1.4 billion. Separate state funds registered a surplus of HUF 37.3 billion against a targeted deficit of HUF 7.3 billion for the full year. In January 2012, they had a surplus of HUF 20.6 billion. Revenue from the new taxes introduced last year with effect from January, such as the financial transaction duty (targeted to bring in HUF 301 billion for the full year), the two new small business taxes (combined HUF 204 billion), the tax on utility lines (HUF 60 billion) or the new insurance tax (HUF 27.5 billion), will be first due in February. Three quarters of the HUF 5 billion revenue of the sectoral or "crisis" taxes came in January. These taxes were introduced temporarily in 2010 and were phased out or replaced by other taxes in 2013, but some of the 2012 payments arrive yet this year. There was no revenue due in January from the extraordinary bank duty, while the budget paid out HUF 300 million on the duty. The tax is targeted to bring in HUF 144 billion in 2013. Of the bigger taxes, corporate tax revenue was HUF 24.1 billion, only 4.4% of annual target and down HUF 2.6 billion on less gross payments and less refunds than one year earlier. VAT revenue, at HUF 226 billion in January, was little less than the pro-rata target and was down HUF 71 billion from a year earlier, as higher revenues were more tha offset by higher refunds due to changes in payment deadlines.