Extra taxes of 1.55 bln euros planned for 2017


TAGS: Finance

The first draft of the 2017 budget, which will be submitted to Parliament on Monday, will contain new taxes adding up to an anticipated 1.55 billion euros. These are tax measures that have already been passed by Parliament and will either start to apply from the beginning of next year or concern measures recently introduced and expected to fetch additional revenues in 2017, such as the value-added tax hike to 24 percent that has been in force since June.

The new taxes will entail more of a burden on households, many of which are already unable to meet their obligations owing to excessive taxation, thereby increasing their problems and the expired debts to the state. Still, the government appears to have underestimated the 2016 revenue targets, as it did not take into account the momentum generated by card transactions.

Sources say that the draft budget will provide for a primary surplus above the target of 1.75 percent of gross domestic product dictated by the bailout agreement. The budget’s target will be close to 2 percent of GDP with the help of the additional taxes as well as the extra revenues expected from the increase in social security contributions (135 million euros).

The increase in the special consumption tax on heating oil (which will apply from mid-October but will also have an impact on 2017 revenues), the higher special consumption rates on other forms of fuel (to apply from January), and the new taxes on coffee, fixed-line telephony and electronic cigarettes are expected to bring in at least 1.55 billion euros next year.

As of today, the special consumption tax on diesel used by farmers will increase by 65 percent, or 13 cents per liter, from 0.20 euros/lt to 0.33 euros/lt. From January 1, the special consumption tax on gasoline will rise from 0.67 euros/lt to 0.70 euros/lt.

Changes are also planned for road tax, with the aim of taking the annual revenues above the 1-billion-euro level. The Finance Ministry’s projections are for additional takings of 180 million euros.