Turkey posts 30 billion lira budget surplus in January as tax revenue jumps

Turkey reported a budget surplus of 30 billion liras ($2.2 billion) last month after income from business tax collection skyrocketed.

The surplus compared with a deficit of 24.2 billion liras in January 2020, the Treasury and Finance Ministry said on Tuesday.

Revenue surged by an annual 96.4 percent to 176 billion liras. That was almost double the pace of annual inflation of 48.7 percent, meaning big gains were made in real terms. Corporate tax income led the increase, rising by 2,962 percent to 14.5 billion liras.

Overall tax revenue climbed by 86.1 percent to 147.4 billion liras, with income from all main items rising at a faster pace than inflation except special consumption taxes.

Turkey is seeking to improve its budget balance as it seeks to convince investors of a revamped economic programme focused on exports and production. The Turkish lira slumped by 44 percent against the dollar last year, sparked by concern for central bank policy – the bank cut interest rates to 14 percent from 19 percent in the final four months of 2021 despite a sharp uptick in inflation, which is running at a two-decade high.

Spending, excluding interest payments on debt, grew by an annual 43.5 percent to 131.7 billion liras. Expenditure servicing debt fell by 35.1 percent to 14.2 billion liras.

The budget for February is expected to be strengthened by an inflow of central bank profits. The bank reported a profit of 49.3 billion liras for 2021 and it is expected to distribute the majority of that amount in February.

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