Maltese Government Reports Revenue Shortfall

by Jason Gorringe, Tax-News.com, London

03 September 2007

Data from the Consolidated Fund of the Maltese Government as at the end of July 2007 has shown that the shortfall between recurrent revenue and total expenditure for the first seven months of this year amounted to Lm89.7 million (EUR208.9 million).

This is Lm4.4 million higher than the shortfall of Lm85.3 million reported for the same period last year. An increase of Lm17.8 million in total expenditure was only partly offset by an increase of Lm13.4 million in recurrent revenue.

During the first seven months of the year, revenue from income tax increased by Lm18.8 million. Concurrently, revenue from social security contributions and from value added tax increased by Lm5.7 million and by Lm2.7 million respectively. On the other hand, revenue from grants declined from Lm27.8 million last year to Lm5.0 million for the period under review.

Recurrent expenditure amounted to Lm461.5 million, an increase of Lm22.4 million compared to the same period last year. This increase was essentially brought about by an increase of Lm8.2 million in Social Security Benefits, by higher outlays (+Lm1.5 million) on medicines and surgical materials by the Ministry of Health, as well as by increases (+Lm4.7 million) under the Ministry for the Family and Social Solidarity, mainly on account of Government’s energy support measures.

Lower interest payments on the Government’s long-term borrowing resulted in a marginal decline of Lm0.3 million in the interest component of the public debt servicing costs for the first seven months of the year. Total interest payments for the period under review amounted to Lm44.3 million. Capital expenditure for the January to July period amounted to Lm58.0 million, registering a decline of Lm4.3 million when compared to the capital expenditure of Lm62.3 million for the same period in 2006. Lower capital outlays by the Ministry of Finance (-Lm4.8 million), and by the Ministry for Tourism and Culture (-Lm1.4 million) were in part offset by higher expenditures under the Ministry for Rural Affairs and the Environment (+Lm2.4 million).

The Central Government debt outstanding at the end of July 2007 amounted to Lm1,428.4 million, an increase of Lm55.7 million from July 2006. When compared to twelve months ago, foreign borrowing declined by Lm10.1 million, while Treasury Bills and Government Stock increased by Lm57.8 million and Lm8.6 million respectively.

Recommended