Percentage of tax revenues allocated to paying salaries was reduced to 60%

Asunción, IP Agency.- The proportion of tax revenues allocated to the payment of salaries in the public sector has been reduced to 60% so far this year, indicating greater quality in spending, reported the Minister of Economy and Finance, Carlos Fernández Valdovinos. In previous years, salaries took up more than 70% of income.

At the meeting of the Council of Ministers, held this Monday, the Minister of Economy highlighted a greater quality of spending, which allows for resources for priority Government programs.

«The use of tax revenues to pay salaries is an indicator of the quality of spending, because generally most of the tax revenues went simply to finance salaries in the public sector. If one from 2019 to 2023 was at a percentage equivalent to 70% in some, 72% in others, but always above 70%,” indicated the minister.

In that sense, he highlighted that this year 2024, between January and April, the percentage of tax revenues for payment of salaries has fallen to 60%.

“I believe that such a low number has never been seen, which really shows that we are working to improve the quality of spending,” said the minister.

He highlighted that reducing the proportion of income allocated to the payment of salaries makes it possible to finance “issues that are priorities such as the purchase of medicines or social transfers.”

«We are carrying out other types of expenses thanks to the containment that we are doing with salaries. “We are improving not only in quantitative terms but also in qualitative terms the part of the expenses,” said the minister.

Controlled deficit level

The minister also referred to the fiscal situation as of April, pointing out that “we continue in accordance with the convergence plan which establishes that the maximum deficit at the end of this year will be 2.6%.”

He indicated that at this moment we have a 3.4% annualized deficit, which puts us “in a very good situation.”

“Last year, in December, Ser had around 1% of GDP in payment of arrears and that will not happen once more this year,” said the minister.

Finally, he highlighted “the tremendous work” of the National Tax Revenue Directorate, which is making it possible to have the income that allows the Government’s plans to materialize and in a certain way compensates for the fact that Yacyreta’s resources are not reaching the coffers of the Treasure.