The Tax Council is harshly criticising the budgetary adjustment draft maintaining that tax revenues may have been overestimated by as much as 0.5% in GDP, so that reaching the budgetary gap target of 6.8% in GDP set for this year “carries significant risks”.
This is the first time that a budgetary adjustment has been analysed and assessed by independent specialists. Owing to the existence of the Tax Council, information to which the public has not had access so far has been disclosed.
The Council considers that the execution of revenues and expenses for the first six months obviously points to a way too bullish assessment against effective achievements, which is not accounted for only through the weaker-than-expected performance of real economy, but also reveals the rising tax evasion, particularly obvious in case of excise duties.
Though major revenue and expense revisions are operated through the budgetary adjustment, these are not accompanied by explanatory notes. To that end, the Council recommends boosting the transparency of the budgetary process.
The trend forecast by the Finance Ministry is not entirely consistent with macroeconomic projections for second half involving deeper economic contraction and the negative impact over incomes of salary cuts and layoffs, says the Tax Council.
As for budgetary expenditures, the Council considers revised projections as largely realistic.

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