Turkey’s security expenses on rise as budget posts surplus on fresh tax hikes

ANKARA

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Turkey’s security and defense expenses almost doubled in February as the government budget ran a surplus of 2.4 billion Turkish Liras ($831 million), mainly thanks to fresh tax hikes. 

Security and defense expenses increased to 105.7 million liras in the government budget in February from around 52.4 million liras in the same month of 2015, according to data revealed by the Finance Ministry on March 15. 

The government’s budget surplus during January-February 2016 stood at 6.6 billion liras, according to Finance Minister Naci Ağbal. 

“Fiscal discipline will be maintained in the coming period and it continues to be one of the most important anchors for the stability of our economy,” he said.

The government’s expenses for health, pension and welfare also increased by 18.9 percent in the first two months of the year to 4.66 billion liras ($1.6 billion) compared with the same period last year.        

According to the ministry, Turkish government’s budget revenue reached 91.5 billion liras ($31.7 billion) in the first two months of the year, which was a 13.9 percent increase compared with the same period last year.       

Tax revenue increased by 12.3 percent within the period to 78.5 billion liras ($27.2 billion). Budget expenditures between January-February rose to 84.8 billion liras ($29.5 billion), marking a 7.6 percent increase year-on-year.      
 
Analysts have underlined the contribution of the fresh tax hikes and price hikes over the budget revenue. 

The government hiked taxes over cigarettes and alcoholic drinks with the advent of the new year.

Electricity prices were also increased by 6.8 percent on Jan. 1. 

“The budget balance seemed to be better than it did last year. There is a big increase in the tax revenue and non-tax revenue. Interest payments were lower in February than they were earlier. We also saw a controlled rise in non-interest spending,” said Oyak Investment Chief Economist Mehmet Besimoğlu, as quoted by Reuters. 

In 2016, the Finance Ministry estimated that budget expenses for the fiscal year would reach 570.5 billion liras ($198 billion), while budget income would reach 540.8 billion ($187.5 billion).