The record budget deficit has already reached CZK 330 billion

Milan Malíček

At the end of September, the state budget deficit rose to CZK 326.3 billion from CZK 298.1 billion in August. The finance ministry announced this on Friday. It is the worst September result since the Czech Republic was founded. Last year, at the end of September, the deficit was 252.7 billion crowns.

Total budget revenues at the end of September rose by 20.8 billion to CZK 1.08 trillion year-on-year. Tax revenues, including social security contributions, increased by 35.7 billion crowns year on year to 943.9 billion crowns. In contrast, tax revenues alone, excluding insurance contributions, fell by 11.6 billion crowns year-on-year to 503.8 billion crowns. Total budget expenditure at the end of September then rose by 94.4 billion year-on-year to CZK 1.41 trillion.

Value-added tax collections rose by CZK 4.8 billion year-on-year to CZK 208.7 billion at the end of September. Corporate income tax collections rose by CZK 24.2 billion years on year to CZK 103.2 billion.

In contrast, personal income tax collections fell by CZK 31.1 billion to CZK 75.9 billion. According to the MoF, the year-on-year comparison reflects the impact of tax changes effective from 2021, particularly the reduction of the tax base by more than 25 percent and the increase in the taxpayer discount. Collections were also negatively impacted by the compensation bonus paid during 2021.

In the case of expenses, current expenses grew. The state spent 1.31 trillion kronor on current expenditure at the end of September, up by 100.6 billion kronor year-on-year. On the other hand, capital expenditure fell by 6.3 billion to 99.6 billion crowns year on year. The approved budget foresees capital expenditure of CZK 185.2 billion for the whole year.

The state paid out CZK 521.3 billion in social benefits at the end of September, up to CZK 15.8 billion year-on-year. Of this, CZK 399.3 billion went to pensions.

This year’s approved state budget deficit is CZK 500 billion. However, according to a recent statement by Finance Minister Alena Schillerová (ANO), the budget for the whole year will end with a deficit of around CZK 400 billion.

Last year, when the pandemic affected the result of the pandemic, the state budget ended in a deficit of CZK 367.4 billion. For next year, the government has approved a deficit of CZK 376.6 billion.