BUSINESS

Deficit certain to be in double digits

By Sotiris Nikas

All categories of state revenues headed south in the first 11 months of the year, with the biggest problem regarding revenues from income tax, followed by value-added tax and customs.

This effectively renders it impossible for the state to achieve the target of collecting a total of 7.5 billion euros in December, January and February and leads to three key conclusions: first, that the real economy has reached a critical point as any new tax imposed to increase revenues can only have the opposite effect; second, that the target for the budget deficit to drop to 9 percent is not going to be attained, more likely ending at 10 percent; and thirdly, that unless the government finds a way to contain tax evasion, there is no prospect for any improvement in state revenues.

The figures for the January-November period, which Kathimerini has seen, show that income tax has brought in 9.3 percent less than in the first 11 months of last year, coming to 10.6 billion euros compared to 11.6 billion in 2010.

Value-added tax revenues dropped this year by 5 percent, or 500 million euros, due to the drop in consumption, while revenues from transaction taxes fell 29 percent, to just 439 million euros.

Revenues from paid services dropped 21.6 percent to 3.5 billion euros and total revenues from customs slid 4.7 percent, or 644.2 million euros, even though VAT on customs grew 3.5 percent.

In total, tax office and customs revenues declined 5 percent annually in the year to November, to 43.2 billion euros.

Alternate Finance Minister Filippos Sachinidis issued a circular to all state bodies responsible for the administration of public finances, dictating that they should not spend a single euro beyond what the budget has provided for.

It says clearly that state bodies should not even take for granted the funds provided by the budget, as ?the inclusion of credit to them in the budget does not necessarily entail their payment.?

State bodies will therefore have to make their own plans for their funding if the state money does not suffice.

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