The state budget for 2022 was handed over to parliament on Thursday, with the drastic reduction of the deficit being the key takeaway.
More details about the budget have emerged since then, with increased revenues and a slight reduction in expenditures expected to cut the budget deficit down to 1.1% of GDP.
In terms of revenue, this is estimated to reach €6.731 billion, €258 million up from the revised estimate for 2021. This reflects a 4% rise year-on-year.
The biggest source of revenue will be from taxes, both direct (taxed incomes and profits) and indirect (taxes on services provided and goods sold).
In total, taxes are expected to bring in €5.193 billion, corresponding to 82% of total revenue.
The remaining 18%, which is estimated to be €1.132 billion, involves non-tax-related sources of income such as the sale of goods and services, rental income, funding and more.
Direct taxation is estimated to bring in €2.130 billion, a 6% increase over the revised figure of €2.014 billion for 2021.
Revenue from indirect taxation is estimated to be €3.063 billion, a 5% decrease over the revised figure of €3.234 billion of 2021. Non-tax-related revenue is estimated to reach €1.132 billion in 2022, a 38% increase over 2021’s €821 million.
In terms of expenditures, these are expected to decrease slightly, dropping from €8.479 billion in 2021 to €8.407 in 2022.
The main area of expenditures is related to government employee payments, including pensions and bonuses. This is expected to go up by around 3%, rising to €3.044 billion in 2022, €83 million more than the year before.
This rise is mainly attributed to rises, the increase in total employment and the Consumer Price Index adjustment.
Operational expenses are expected to go up by 8% in 2022, rising by €73 million to €972 million.
Expenses for development projects are estimated to go up by 10% and include projects already under construction, co-funded projects, training programmes, and funding to educational institutions, among other things.
This rise has been attributed to the start of numerous development projects, including road works, buildings, and other projects which fall under the EU’s Recovery and Resilience plan.
Expenditures on the repayment of public debt are estimated to go down by 13% in 2022, with the total amount expected to be €458.2 million, €71.3 down from 2021.
In terms of expenses broken down by ministry, the largest budget will be given to the finance ministry (€1.744 billion), the ministry of education (€1.239 billion) and the ministry of health (€1,059 billion).
Source: Cyprus Mail