Budget supported by the income tax

Revenues of the general consolidated budget stood at 7.5 billion RON (2.1 billion euros) in August, a 17% increase against August 2005, data from the Ministry of Finance shows. The increase in budget revenues slowed down in August, against an average pace of 23% seen in the first seven months, and the 38% pace recorded in July this year. Income tax witnessed the fastest growth, managing to leave behind the value added tax in terms of state revenues dynamics. While income tax collection saw a 48% increase in August, VAT collection grew by a mere 7%, the slowest monthly pace seen in the last two years. All the above trends represent nominal rises or declines, which do not take inflation into account. Statistics show that the public budget has found a new pillar of strength in the income tax, after basing its growth on consumption, i.e. on VAT collection, for over a year and a half. This could be explained by the increase in income-related fiscal obligations, operated as of January 1, 2006.