Greece’s primary surplus for last year will exceed 1 billion euros, a senior Finance Ministry official estimated on Tuesday, compared with a target of 812 million euros that the 2014 budget has included for 2013.
Should that estimate prove correct at the end of February, when the revenues for 2013 will have been collected, and be confirmed by the official figures that Eurostat is scheduled to issue in April, the government will have more funds to spend on social needs. The prime minister has promised that 70 percent of last year’s primary surplus will go toward correcting social injustices created by the austerity measures.
However, according to a report presented on Tuesday by the Parliamentary Budget Office, the exhaustion of taxpayers’ capacity to pay more taxes and the increase in expired debts to the state puts the achievement of a 2.9-billion-euro primary surplus for 2014 in doubt.
The office’s analysts showed that Greece suffers from excessive taxation by comparing Greek rates with the European average: The highest value-added tax rate in Greece stands at 23 percent, against 21.52 percent in the European Union and 20.45 percent in the eurozone; the top income tax bracket for enterprises has a 26 percent rate, with the average EU rate at 21.84 percent and that for the eurozone at 25.95 percent; the top rate for taxpayers amounts to 46 percent in Greece against 36.67 percent in the EU and 44.52 percent in the eurozone.
The report adds that all tax increases since 2010 have created a major burden on households without the equivalent benefits for state coffers. This is attributed to tax evasion, the exhaustion of taxpaying capacity and the increase in unemployment.
The study highlights that income tax on salary workers and pensioners has increased seven-fold since 2010, while the tax that the self-employed will pay in 2014 will be up to nine times higher than in 2010. Property taxation has grown seven-fold within five years, as the total amount of tax real estate owners will pay this year will reach 3.5 billion euros, up from 500 million in 2009.