Giorgi Kakauridze: “The revenue part of the 2022 budget was executed by 100.6% of the plan.”

Verdict: FactCheck concludes that Giorgi Kakauridze’s statement is TRUE.

Resume: The revenue part of the 2022 budget was planned at GEL 16.357 billion and the real execution was 0.6% more – GEL 16.450 billion. The planned revenue execution figures reached or exceeded 100% for different components of the plan.

Analysis:

On 28 June 2023, at the plenary session of the Parliament of Georgia, the First Deputy Minister of Finance, Giorgi Kakauridze, spoke about 2022 budget execution indicators. In particular, he stated (from 35:00): “Revenues of the state budget in the last year amounted to GEL 16.450 billion and the execution rate is 100.6%. Among revenue components, tax incomes were GEL 14.997 billion with a 100.1% execution rate, grants were over GEL 359 million with a 104.8% execution rate and other incomes were GEL 1.115 billion with a 106% execution rate.

Budget receipts consist of four parts: revenues, the decrease of non-financial assets (privatisation), the decrease of financial assets and the growth of obligations. Revenues occupy the largest part within budget receipts. Prior to the pandemic, the share of revenues accounted for 81%-83% of the total budget in 2017-2019. In 2020, its share dropped to 58% as a result of declining economic activity and record borrowing, although it rebounded back to 80% in 2022.

In 2022’s budget, revenues were planned at GEL 16.357 billion. In accordance with the finalised reporting, the real amount of revenues exceeded the planned figure by 0.6% and reached GEL 16.450 billion.

Revenues include several elements with tax incomes being the most important. In 2022, it was planned to collect GEL 14.965 billion in taxes whilst the factual execution was 0.1% more at GEL 14.977 billion. Budget plans for the VAT, income tax and import tax were executed in surplus and profit tax was in line with the plan whilst excise and other taxes saw a lower factual execution as compared to the planned amount.

Table 1: State Budget Execution Performance

Source: State Treasury (Ministry of Finance of Georgia)

As opposed to revenues, the privatisation plan was only executed by 67.6% with GEL 202 million instead of the planned GEL 300 million.

The execution rate for the decrease of non-financial assets component reached 96.2% with GEL 144 million instead of the planned 150 million.

In the increase of obligations component, the plan was fulfilled by 102.5% with GEL 3.732 billion instead of GEL 3.642 billion. The domestic obligations growth plan was implemented by 103.6% with GEL 1.346 billion instead of GEL 1.300 billion and the foreign obligations growth plan was implemented by 101.9% to with GEL 2.386 billion instead of GEL 2.342 billion.

In 2022, total revenues exceeded the planned amount of GEL 20.449 billion by 0.5% and reached GEL 20.549 billion.

As for the indicator of payments (expenses, increase of non-financial assets, increase of financial assets, decrease of obligations), it was executed by 99.9% of the plan with GEL 20.163 billion instead of GEL 20.186 billion.

In regard to both receipts and payments, the actual execution rate is largely within the margins of 100% - it either exceeds the plan or slightly lags behind (except for privatisation). In this speech, Giorgi Kakauridze also offered a detailed overview of the spending part of the budget which, similar to the revenue component, was true.


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