Around one in four euros of the first installment of income tax has not been paid due to the significant drop in their net salaries as a result of increased taxation.
According to data from the Ministry of Finance, an estimated 272 million euros in taxes has yet to be paid.
This development has resulted in a tax revenue shortfall to the tune of 375 million euros, a development which is raising concern in the government’s economic team since, by the end of the year, taxpayers will be required to have paid around 21.4 billion euros in both direct and indirect taxes.
Shrinking household incomes may create problems in the implementation of the budget, something which came to attention in July 2016’s revenue data. This particular month is considered the most important in the collection of tax revenues.
Tightened expenditure has resulted in a seemingly positive budget profile for the first seven months of the year. The primary surplus stood at 3.55 billion euros compared to a surplus of 3.7 billion euros for the same time last year and against a target of 874 million euros.
According to data released on Friday by the Ministry of Finance, the drop in July revenue is mainly due to the following reductions:
* Personal income tax by 272 million euros.
* Income tax for special categories by 55 million euros.
* Other direct taxes by 45 million euros.
* VAT on tobacco tax by 41 million euros.
* Other excise taxes (tobacco, etc) by 160 million euros.
* Other non-tax revenues by 132 million euros.
Increased revenues compared to the target were noted as follows:
* On corporate income taxes by 295 million euros.
* Property tax by 42 million euros.
* Miscellaneous VAT by 37 million euros.
The tax refunds (excluding refunds from the arrears clearance plan) for July 2016 came to 249 million euros, up by 40 million euros against the target for the month.