At the plenary session of the Parliament of Georgia held on 18 September 2013, Zurab Melikishvili, member of the Parliamentary Minority, stated that according to the “report of the previous month,” state budget revenues have seen a shortfall of GEL 350 million. He further added that the Ministry of Finance had shifted the shortages present in the first, second and third quarters to the fourth quarter. However, they would not be able to shift the shortage of the fourth quarter and the Ministry of Finance would have to give answers on why the state budget had not been filled.FactCheck
set out to check whether or not according to the “report of the previous month” the revenues of the state budget had seen a shortfall of GEL 350 million.
The chart below shows the figures for the 2013 state budget according to the quarterly budgetary plan of the Ministry of Finance worked out at the end of 2012 prior to its revision.
As can be gathered from the chart, in the first two quarters, GEL 3,469,803,500 were to be generated in total of which GEL 3,229,290,000 were to come from taxes. If we compare these figures with the budget execution (i.e., the actual amount of money accumulated in the budget), we observe a shortfall of GEL 247,767,900 [2,981,522,100 - 3,229,290,000 = -247,767,900] and this is only with regard to the revenues generated through taxes while in the total revenues we witness a shortfall of GEL 310,560,000 [3,159,243,500 - 3,469,803,500 = -310,560,000].
It should be noted that in the Law on State Budget the budgetary plan (of revenues, costs and other articles) is prepared for a period of one year and changes in it can be introduced throughout the year based only upon Parliament’s consent. As for the quarterly plan, it is not included in the Law on State Budget and solely represents an internal document of the Ministry of Finance which undergoes changes and corrections in the course of the whole year according to the current state of affairs. These quarterly plans, before or after being revised by the Ministry, are public and can be acquired upon request. In response to our letter, in which we requested the quarterly and monthly detailed budgetary plan on state budget revenue and expediture, we received the data solely on the quarterly plan. Therefore, we do not have data on the revenue predictions for July and August [initial budgetary predictions, made at the end of 2012, prior to the revisions] and have only the quarterly budgetary plan made available to us by the Ministry of Finance.In his statement Melikishvili refers to “the report of the previous month.” FactCheck
contacted Zurab Melikishvili personally to ascertain if he had indeed based his statement upon the reports of August or July. In our conversation he informed us that he also had only the quarterly budgetary plan from the Ministry of Finance and had made his statement based upon it. Consequently, the number indicated by him, based on the quarterly report – GEL 350 million – is inaccurate and exceeds the actual shortfall observed in the first two quarters of 2013 [GEL 310 million] by GEL 40 million.
The website of the Ministry of Finance provides data on the budget execution for July and it amounts to GEL 634 million. Data on August is still in the process of being calculated.
As can be seen in the chart above, the predicted revenue for the third quarter is set at around GEL 1,934 million. According to very rough calculations, the monthly plan for the third quarter stands at GEL 644 million. Comparing the budgetary execution for July [GEL 634 million] to the avarage monthly plan [GEL 644 million] calculated using the quarterly prediction for the third quarter [GEL 1,934 million], a shortfall of 10 million can be observed. Theoretically, however, the revenues in August and September could provide for the execution of the budgetary plan in the third quarter.
Conclusion In the first six months a shortfall of GEL 310,560,000 million can be observed in state budget revenues. As Melikishvili bases his statement upon the quarterly, and not the monthly, budgetary plan, the number indicated by him [GEL 350 million] is incorrect and exceeds the budgetary shortfall witnessed in the first two quarters by GEL 40 million. The MP is right, however, pointing out the tendency of growth in budgetary deficit starting from the beginning of the year. Accordingly, we conclude that MP Zurab Melikishvili’s statement, “Revenues have decreased, state budget revenues have seen a significant shortage. According to the report of the previous month, there is a shortfall of GEL 350 million in revenues,” is MOSTLY TRUE.