Deputies from the Assembly of Peoples' Representatives - the Upper House of the Kyrgyz parliament - passed the republic's draft budget for 2004 in its first reading on Tuesday with a deficit of 561.1 million som, or 3.8% of expenditure, Zhenishbek Eshenkulov, chairman of the Assembly's budget committee, told Interfax.
Budget revenue in 2004 is planned at 14.107 billion soms, with expenditure of 14.668 billion soms.
In the structure of budget revenue, tax revenue accounts for 10.763 billion soms.
According to the draft budget, the deficit will be covered using grants and credits to be received by the republic in 2004.
However, the parliament proposed to the Kyrgyz Finance Ministry to consider, in time for the second reading, the possibility of increasing budget revenue by 363 million som by increasing revenue from some types of taxes, including income tax, profit tax and VAT.
The deputies carefully studied the volume of tax revenue and found some positions where tax collection could be increased, Eshenkulov said.
In addition, the deputies are proposing to increase wages to public sector workers by 50% in 2004, while the government planned to increase them only by 30%.
Eshenkulov said that to search for additional sources of financing for unprotected budget articles, the deputies are proposing to reduce spending on state administration by 15%-20%. According to the draft budget, this will amount to 2.354 billion soms in 2004.
In turn, Kyrgyz Finance Minister Bolot Abildayev told Interfax on Tuesday that the government agrees that it is necessary to reduce spending on supporting the state apparatus, but for this it is necessary to complete the reform of state government and a functional analysis of ministries and departments. We agree that it is necessary to increase wages for teachers and doctors, but at the moment, due to insufficient resources, the Finance Ministry is not able to agree to a 50% increase in wages, the minister said.
Abildayev also said that by the second reading the Finance Ministry will prepare changes in the budget in line with the remarks and proposals made by deputies, having agreed them with experts from the International Monetary Fund, which will arrive in Bishkek at the start of November.
The Kyrgyzstan budget for 2003 was confirmed with revenue of 13.844 billion soms, expenditure of 13.9568 billion soms and a deficit of 124 million som,s or 0.15% of GDP. However, the IMF forecasts that the republican budget deficit in 2003 may amount to 1.3 billion soms, instead of the 124 million soms planned earlier. The budget deficit in the first half of this year, according to early figures, amounted to 616 million soms.
Interfax, October 15, 2003