The implementation rate of development expenses from the state budget stood at 13 per cent at the end of April, slightly higher than the ten-year average of 12 per cent for the same period, according to the state treasury of the Republic of Cyprus.

Regarding revenue, indirect taxes increased by €150 million by April 2024 compared to the previous year, primarily due to a rise in VAT revenue. Direct tax revenue also saw an increase of €170 million, attributed to higher income tax collections from both individuals and corporations.

Specifically, according to the April 2024 edition of ‘Implementation of the State Budget,” released on Thursday by the state treasury, total revenues reached €2.74 billion by the end of April 2024, representing 24 per cent of the state budget (compared to €3.46 billion or 35 per cent in 2023).

Actual expenses amounted to €2.90bn, corresponding to an implementation rate of 22 per cent (the same as 2023, with €2.69bn).

The implementation of the state budget in terms of revenue shows a decrease compared to the same period last year (2024: 24 per cent, 2023: 35 per cent), mainly due to increased inflows from the issuance of Medium-Term European Bonds (EMTNs) amounting to €1bn in April 2023.

Regarding expenses, the implementation of the state budget remains stable (2024: 22 per cent, 2023: 22 per cent).

It is noted that the state budget, prepared on a cash basis, shows an increase in revenue of 16 per cent for 2024 (€11.28bn compared to €9.77bn in 2023) and an increase in expenses of 9 per cent (€13.1bn compared to €12bn in 2023).

The projected increase in revenue is primarily due to a rise in both indirect and direct taxes by €0.68bn and €0.61bn, respectively.

The projected increase in expenses is mainly due to higher repayments of loans and interest, as well as salaries, pensions, and gratuities, by €0.76bn and €0.35bn, respectively.

Revenue

More specifically, regarding revenue up to April 2024, the state treasury reports that indirect taxes increased by €0.15bn (13 per cent) compared to 2023, mainly due to an increase in VAT revenue by €0.13bn (2024: €1.0bn, 2023: €0.87bn).

Direct taxes increased by €0.17bn (19 per cent) compared to 2023, primarily due to higher income tax collections from both individuals and corporations (2024: €0.94bn, 2023: €0.76bn). There were no loan withdrawals by the end of April (2023: €1.0bn).

Expenses

Regarding expenses related to salaries, pensions, and gratuities, the implementation by the end of April shows an increase of 6 per cent (€0.06bn) from €0.95bn in 2023 to €1.01bn in 2024.

Loan repayments and interest payments by the end of April amounted to €0.46bn (2023: €0.38bn), with €0.15bn (2023: €0.12bn) covering borrowing interest and charges and €0.31bn (2023: €0.26bn) for domestic loan repayments.

Social benefit expenses by the end of April amounted to €0.55bn (2023: €0.49bn). According to the state treasury, the €0.06bn (12 per cent) increase is due to higher social welfare benefit expenses by €0.04bn (2024: €0.25bn, 2023: €0.21) and increased health benefit expenses by €0.02bn (2024: €0.23bn, 2023: €0.21bn).

Regarding transfers and subsidies, implementation by the end of April shows an increase of €0.03bn from €0.46bn in 2023 to €0.49bn in 2024. This increase is primarily due to a rise in the government’s contribution to the Social Insurance Fund by €0.03bn (18 per cent) (2024: €0.20bn, 2023: €0.17bn).

Operational and other expenses by the end of April amounted to €0.25bn (2023: €0.30bn), showing a 17 per cent decrease.

Implementation of Development Expenses

Moreover, according to the state treasury, the implementation of capital expenses by April 2024 amounted to €76.4m, mainly due to expenses for the road network (€27m), construction projects (€8.7m), school buildings (€8.1m), land and building purchases (€7.6m), fixed and mobile machinery (€6.2m), equipment (€5.8m), sewerage and water systems (€4m and €2m, respectively), and government building improvements (€2.2m).

Regarding co-financed and other financing expenses, implementation by April 2024 amounted to €56.2m, primarily due to co-financed projects by non-governmental agencies (€18.5m), projects co-financed by Internal Affairs Funds (€6.8m), the Tuition and Meals Subsidy Scheme for children up to 4 years old (€6.4m), European Competitive Programmes (€4.9m), the Competitiveness and SMEs Scheme (€4.6m), and the “Save and Upgrade in Homes” scheme (€2.9m).

Regarding grants, contributions, and subsidies, implementation by the end of April 2024 amounted to €45.5m, mainly due to grants to the University of Cyprus (€30.2m), the Cyprus University of Technology (€10.6m), and the Open University of Cyprus (€1.7m).

Concerning the implementation of social benefits, this amounted to €16.4m by the end of April 2024, mainly due to the state scholarship programme (€8.7m), grants to voluntary organisations (€3.1m), cultural grants (€2.5m), and educational grants (€1.3m).