Analysis of the Draft State Budget for 2017

In general, the draft state budget for 2017 has a number of positive signals: it supports some structural changes required for making tax administration simpler and reducing tax privileges and it strives to improve the effectiveness of public expenditures. However, there is still some potential for improvements since the budget shows rather high inertia (the structure of both revenues and expenditures undergoes no significant changes, apart from some exceptions) and contains risks of a shortfall in planned revenues, and as a result – the increased deficit. Our general recommendations remain unchanged: to ensure fiscal sustainability it is necessary to review the effectiveness of budget expenditures and to introduce the mid-term planning.