Though the government's freshly revised 2009 budget better reflects changes because of the global financial crisis than the earlier version, the revenue target still carries too much risk in light of an expected recession, state audit office (ÁSz) chairman Árpád Kovács said at an extraordinary meeting of Parliament's budget committee on Sunday.
The revenue targets a 3% drop in VAT revenue and a 2.7% decline in personal income tax revenue, but the decreases are too small in light of a projected 1% contraction of GDP, together with a 3.8% drop in household consumption and a 2.7% fall in real wages, Kovács said.
Changes to the number of employed people in Hungary are one of the greatest dangers to the new macroeconomic targets in the revised budget bill, Kovács said. ÁSz sees the number falling 2.0%-2.5%, which is bigger than the Finance Ministry's projection, he added.
ÁSz also said the cuts in revenue from corporate tax and other business taxes were also too small. The fresh budget modification, submitted to Parliament over the weekend, calculates with export growth of 3.9% instead of an earlier 4.1%, and cut the forecast for import growth to 2.4% from 4.1%.
In spite of the risk, ÁSz assessed the targets in the revised budget bill as achievable. (MTI – Econews)