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Photo by Judita Grigelytė (VŽ).
The government endorsed in 2021 the bill to approve the state budget and municipal budgets and financial indicators, which will be submitted to the Seimas for consideration along with the related legal acts.
Additions throughout the text.
The budgetary revenue of the State in 2021, compared to those approved this year, will decrease by 1.3% (145,369 million euros) to 11,385 million LTL. Spending will increase by 21.2% (2,712 million euros) to 15,499 million euros. EUR.
Vilius Šapoka, the finance minister, calls the budget conservative, but the deficit will reach long-seen heights and public debt will hit a record next year. It is true that projections for subsequent years project a modest decrease in the budget deficit and debt.
The budget is based on the September macroeconomic forecast of the Ministry of Finance that the country’s GDP in 2020 will decrease by 1.5% and will increase by 3.3% next year.
Does not offer new taxes
The good news is that the draft budget does not introduce any new changes in tax laws.
“In order not to cause an additional shock to the economy, introduce new taxes or make significant changes to the tax system, I do not think it is prudent,” said Vilius Šapoka, the finance minister, after the government meeting on Wednesday.
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After the approval of the Government in 2021. The bill on the approval of financial indicators of the state budget and municipal budgets will be presented to the Seimas for its consideration, but it will not be clear what will be the final version of the budget that will be adopted after the meeting of the Seimas, especially if the ruling majority changes. The Seimas will approve the budget no later than 14 calendar days before the beginning of the year.
The review of the preliminary draft budget indicates that in 2021 Consolidated state and municipal budget revenues compared to 2020 certified revenues will fall by 1.5% to 13.42 billion. EUR. Consolidated expenditures from the state and municipal budgets will increase 18.4% to 17,578 million compared to this year’s allocations. EUR.
“As we promised, we have prepared a safe budget project for next year. In it, we take into account the most vulnerable groups in society and invest in the future. To fulfill the commitments made, it is very important to intentionally stimulate the economy – this requires long-term investments and suspending other expenses – in order to manage the debt growth ”, emphasized V. Šapoka.
[infogram id=”31718f6b-2b24-4baa-bd28-a5dccb377b20″ prefix=”1N3″ format=”interactive” title=”Valstybės biudžeto pajamos 2019-2021 m.”]
The costs to the economy are the ones that increase the most
VAT collection is expected to decline further next year, but personal income tax revenues are not expected to decline, as the ministry predicts that the wage bill will fall by 2021. It will grow by 4.9% .
The largest expenditures will go to social protection, the economy and education, and the largest expenditures will go to the economic sector, with more than 6 billion euros in the coming years. Euro value of the future Lithuania economic DNA plan.
Compared to 2020, it is planned to allocate 321 million. Eur more for social benefits.
According to the submitted draft budget, the monthly minimum wage (MMA) will increase to 35 EUR next year, from 607 to 642 EUR.
Child money in 2021 increases by ten euros, to 70 euros per child and 110 euros for raising three or more children. The budget for next year foresees 63 million. EUR.
Retirement pensions will grow twice as fast next year as salaries, which are forecast to rise around 3.3%.
VŽ wrote that according to Sodra’s submitted draft budget, in 2021. he proposes to increase them by another 7.17%. In this case, the average old-age pension would increase from EUR 377 to EUR 404, and the average pension with the required seniority would increase from EUR 399 to EUR 428. In general, increase pensions in 2021. The budget is set at 258 million. EUR.
According to preliminary projections, the public finance deficit will reach around 8.8% this year and 5.0% next. Once the pandemic is over, the rules of fiscal discipline in the euro area will return, so in 2022. the deficit should not exceed 3%, that is, by 2022. – 2.7%, 2023 – 1.6 %
Estonia is projected to have a public finance deficit of 6% next year and Latvia a deficit of 4%.
The level of public finance debt will reach 47.7% of the country’s GDP this year, next year the level of debt will rise to another 50.2%. – 49.4%, 2023 – 50.3%.
[infogram id=”e63cbd7e-65dd-4129-92b3-f2a4ec920a43″ prefix=”9Ds” format=”interactive” title=”2021 m. biudžetų išlaidos, mln. Eur”]Where costs are rising the most
The Ministry of Finance points out that most of next year’s budget will be allocated to the field of social security, including the budget of the State Social Security Fund: 7,335 million. EUR. Compared to 2020, an additional 783 million will be allocated to the social field. EUR.
There will also be a significant increase in the economy, with a total of 3,578 million euros. EUR. Compared to 2020, that equates to $ 1.053 billion. Eur more. The funds allocated to education will also increase: 683 million. 3,064 million euros in total. EUR. 2,732 million euros are earmarked for health. EUR, i.e. EUR 396 million. Eur in the approved plan for more than 2020.
In order to achieve fast and efficient investments in the recovery and growth of the Lithuanian economy, the Structural Funds of the European Union are projected in 2021. the state budget foresees 2 billion. Investments in euros.
For the Lithuanian economy to be sustainable, innovative and create high added value, the DNA Plan of the future economy for new investments in 2021. the state budget foresees around 1.6 billion. EUR. Most of it, that is, 1.3 billion. EUR, the funds from the European Union are expected to amount to 29 million euros. – Co-financing funds of euros, another 199 million. Eur – funds from the state budget.
Municipal revenue will grow 8.4%
Compared to 2020, total revenue from municipal budgets is expected to grow by LTL 276 million in the coming years. Eur (8.4%). Due to the unusual circumstances brought on by the coronavirus, the collection of municipal budget revenues has been affected this year, so the funds from the state budget will be allocated and offset in 2020 next year. Loss of income. Municipalities will be able to borrow up to € 53 million if necessary. EUR.
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