oughly double the
usual 7- to 8-percent difference between the state and the smaller
national budget. A surmise that the state budget represents an overall
budget and that the national budget serves to finance central government
activities only is therefore not warranted.

Except for a slight decline in revenues in 1961 and 1963, coincident
with the country's political and economic break with the Soviet Union,
the annual state budget has been rising steadily to a level of 5.21
billion leks (5 leks equal US$1--see Glossary) in revenues and 5.11
billion leks in expenditures for 1970. By comparison with the budget for
1960, revenues increased by 85 percent and expenditures by 102 percent,
with a corresponding decline of 65 percent in the budgetary surplus. On
a five-year basis, comparing the Fourth Five-Year Plan with the Third
Five-Year Plan, both revenues and expenditures rose by about 40 percent,
with a slightly higher increase in revenues.

A relatively greater stringency of funds for budgetary purposes after
the break with the Soviet Union is reflected in the planned annual
budgetary surplus, a permanent feature since 1946 and a matter of great
pride for the leadership. From a level of almost 24 percent in 1950, 15
percent in 1955, and 10 percent in 1960, the surplus dropped to 1.1
percent in 1962 and 1.5 percent in 1963. Despite a slight recovery in
subsequent years, except for 1968 when it declined to only 1 percent of
revenues, the planned surplus did not again approach its earlier size.

Partial information on sources of revenue is available to 1967.
Published statistics listed a turnover tax on all goods produced,
deductions from enterprise profits, direct taxes on the population
(primarily income taxes), and social insurance premiums. These sources
yielded, on an average, 60 percent of the total revenue in the 1960-65
period, and their share rose steeply to 74 percent in 1967. The balance
of the revenue, omitted from official statistics, consisted primarily of
income from agriculture in the form of compulsory deliveries, proceeds
from state farm operations, payments to machine-tractor stations, and
taxes.

The most important among the listed revenue sources were the turnover
tax and deductions from profits. Together their yields ranged from 50
percent of total revenue in 1960 to almost 69 percent in 1967, but their
relative weights changed markedly during this period. In 1960 the
turnover tax yielded 40 perc