Revenue shortfall in January calls for emergency action

By Prokopis Hatzinikolaou

Alarm bells are ringing at the Finance Ministry following January’s serious shortfall in state revenues. The government will need to find ways of bolstering the public takings as last month they were 7 percent lower than the target set in the budget, according to provisional figures by the ministry.

January saw the cashing in of just 4.05 billion euros against a targeted 4.36 billion euros. The message from this front is particularly worrying as any divergence from the section of the streamlining program that concerns the reduction of the deficit automatically triggers the correction clauses at the end of each quarter. They pertain to a symmetrical decline in primary expenditure with the exception of salaries and pensions.

Compared with January 2012, revenues shrank by 775 million euros last month, or a significant 16 percent. Ministry officials attribute the decline to the drop in consumption, as revenues from value-added tax contracted by 15 percent, while those from the special consumption taxes were also lower.

The overall picture would have been far worse had it not been for property taxes and the remaining installments of income tax payment for 2012. Ministry data show that direct tax revenues increased by about 9 to 10 percent in January compared with a year earlier.

Given the recession, the ministry has no other means left to rectify the situation but to try to contain tax evasion and improve tax collection. However, to date nothing has changed in the tax collection mechanism ands, according to ministry officials, everyone is anticipating action by the new general secretary for state revenues, Haris Theoharis.

In the coming days Theoharis will meet with the directors of the 36 biggest tax offices in the country to studt ways of collecting expired debts according to the proposals by the country’s creditors and the European Commission’s Task Force for Greece. Expired debts have topped 56 billion euros, after the addition of new debts last year adding up to 13 billion.

The same officials note that the Financial Crimes Squad (SDOE) is currently in disarray, doing little else than checking anonymous allegations of nonpayment of taxes.