BUSINESS

State budget concerns growing

Revenues are under threat from income and property tax shortfalls and social security system problems By Sotiris Nikas

Worries are growing at the Finance Ministry about the rest of this year and the possible consequences on discussions regarding the coverage of the 2015 fiscal gap. Concerns are focused on income tax revenues, yields from the new property tax and the economic state of the social security funds.

While the budget recorded income tax revenues at end-July that beat the target by 555 million euros, a 1-billion-euro shortfall has been identified in the sum of tax demanded from taxpayers compared with the target set for the whole of the year. This is raising fears among ministry officials who are worried whether the positive image on this front could change by the end of the year.

Another factor threatening the collection of the necessary revenues for 2014 is the changes to the new single property tax (ENFIA). Ministry sources say that despite the changes to be submitted in Parliament on Monday, the target for the collection of 2.65 billion euros remains intact, but until the tax has all been paid no one can feel certain about that.

A third problem regards the state of the social security funds. Additional funding of 300 million euros has already been approved to cover part of the deficit of the self-employed professionals’ fund (OAEE), while the Social Security Foundation (IKA) is asking for another 200 million euros and some 200 million will also be disbursed soon for the needs of the civil servants’ fund.

The crucial month regarding the size of the hole from the social security funds will be October, as that is when it will be known whether the money set aside in the budget for the support of the funds will suffice to cover their extra needs.

For now the ministry is insisting that the program targets regarding the primary surplus will be achieved, as the results of efforts to contain expenditure have been encouraging. The government has even set itself a higher target for the primary surplus, at 2.4 percent of the gross domestic product, against the 1.5 percent foreseen.

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