At a session of the Government of Georgia, the Prime Minister, Irakli Gharibashvili, declared that the state budget revenues had a surplus of GEL 106 million and reached GEL 2,035 million which constitutes 104.8% of the planned amount.

took interest in the accuracy of Irakli Gharibashvili’s statement.

According to the information of the Treasury Service of the Ministry of Finance of Georgia, the budget revenues were planned to be GEL 2.199 billion in the first quarter of 2015. However, the budget revenues in the first quarter reached GEL 2.35 billion. As a result, revenues were fulfilled by 104.8%. Instead of the planned GEL 1.80 billion tax income, the state budget received GEL 1.28 billion and the plan was fulfilled by 102%. The remaining parts of the revenues comprised grants and other income.

Of note is that a "tax on personal income, corporate income and capital gains" was planned to be GEL 755 million whilst the budget in fact received income in the amount of GEL 779 million which constitutes 103.2% of the plan. Of this GEL 779 million, the income tax amount was planned to be GEL 468 million but the budget received only GEL 460 million. Therefore, the plan was fulfilled by 98%.

The amount of revenues received as corporate income tax was GEL 319 million which constitutes 111.2% of the expected amount (GEL 287 million) for the first quarter of 2015. Revenues received as Value Added Tax were also fulfilled with a surplus as the expected amount for the first quarter was GEL 800 million whilst the budget actually received GEL 848.6 million. Revenues received from excise tax were 9% less than the expected amount and the budget received GEL 177 million instead of GEL 193 million. The expected amount of grants for the first quarter was GEL 44.6 million whilst the budget received GEL 58 million (130.5% of the planned amount).

As a comparison, the state budget revenues fulfilment rate was 97% in the same period of 2014. It was 100.5% in 2013 and 102% in 2012.

The surplus of budget revenues was caused to some extent by the depreciation of GEL and the rising level of inflation. The 2015 state budget plan envisaged having the USD to GEL exchange rate kept at 1.8 whilst the USD to GEL exchange rate has recently exceeded the 2.3 margin. The depreciation of GEL increased the amount of USD denominated grants when converted to GEL. Additionally, the depreciation of GEL caused the acceleration of the pace of inflation. According to the National Statistics Office of Georgia, the annual inflation rate reached 2.5% in April 2015. As budget tax incomes are planned according to the nominal GDP growth (nominal growth constitutes the sum of real growth and the inflation rate), the rising prices on goods and services result in increased budget revenues.

Looking at the expenditures part of the budget, spending was planned at GEL 2.162 million according to the first quarter budget fulfilment report. However, only 96% of the plan was fulfilled. Goods and services together with wages represent two fields in which the planned spending for the first quarter was not fulfilled. The wages component received 4.1% less than the planned amount. In regard to goods and services, GEL 180 million was transferred instead of the planned GEL 209.6 million. Consequently, only 86% of the plan was fulfilled.

According to the data for the first quarter of 2015, state budget revenues were indeed fulfilled by 104.8%. The budget received GEL 2,305 billion instead of the planned GEL 2.199 billion. Of mention is that the surplus in the budget revenues was also caused by the depreciation of GEL and the acceleration of the pace of inflation.