Commenting on the findings of a recent Eurostat study titled “Taxation Trends in the European Union,” Alpha Bank has described the obligations of taxpayers in Greece as burdensome.
The study disclosed that annual tax revenues derived from capital in Greece represented 7.3 percent of GDP, compared to a European Union average of 6.7 percent.
Two-thirds of those revenues that derive from capital stem from earnings generated by capital investments, while the other third was came from tax imposed on capital holdings.
Alpha Bank noted that taxation levels for property in Greece ranked fifth in the EU, providing tax revenues that amounted to 1.4 percent of GDP in 2012, compared to 0.4 percent prior to the recession, now in its sixth year.
Based on its on figures, Alpha Bank noted that, in Greece, capital earnings tax amounted to 4.9 percent of GDP, while taxes paid on capital holdings reached 2.4 percent of GDP. The respective average EU figures were 4.7 percent and 1.9 percent.
Taxes paid by Greek households on capital earnings were more than double that of the EU average, or 1.4 percent of GDP, compared to 0.6 percent.
In 2012, Greek households held the second-highest place in terms of capital earnings tax, which has risen sharply in recent years, from 0.9 percent of GDP prior to the crisis to 1.2 percent of GDP in 2011 and 1.4 percent of GDP in 2012.
Based on these figures, analysts at Alpha Bank described the government’s plans to lighten the tax burden on taxpayers as a desirable move, “as long as [the revisions] do not lead to a new tax system made up of a patchwork of revisions without any growth objectives and cohesion. In contrast, they must shape a tax system with the most neutral repercussions possible, offering incentives for work, economic activity and savings.”
Commenting on the country’s new ENFIA property tax, the bank noted that the strong wider reaction was no surprise as “the effort to implement it comes amid conditions in which property earnings are not only being constantly reduced, but at the same time overtaxed, while a great proportion of wealth, such as real estate, is either not offering any yields, for taxes to be paid, or cannot even be liquidated.”