Cyprus budget posts surplus in Q3

**Taxes on income and wealth leap 23.8% **

The Cyprus government made some headway in reducing its annual budget deficit by posting a budget surplus in the third quarter.
According to preliminary data on the EU-compatible general government accounts, total revenue rose by 8.3% compared with the corresponding period of 2010 to EUR 1,978.4 mln.
Total expenditure fell by 2.1% to EUR 1,891.9 mln.
The result was a surplus of EUR 86.5 mln compared with a deficit of EUR 105.7 mln deficit in the corresponding period of the previous year.
In July-September taxes on production and imports fell by 0.3% to EUR 671.9 mln. Of this total, VAT fell by 0.9% to EUR 397.2 mln.
On the other hand, taxes on income and wealth leapt by 23.8% to EUR 707.7 mln.
Revenue from sales of goods and services decreased by 3.7%.
On the expenditure side compensation of employees rose by 4.5% to EUR 685.4 mln; social transfers by 4.9% to EUR 629.4 mln; and current transfers by 2.9% to EUR 91.0 mln.
There was a 4.6% decline in capital formation and an 11.5% fall in intermediate consumption.
Recently the finance minister, Kikis Kazamias, has said he expected the budget deficit for the full year to reach 6% of GDP.
He is struggling to persuade unions that the government needs to freeze public-sector pay for two years, otherwise he says Cyprus will have to enter the EU support mechanism.