BUSINESS

Paying taxes via credit cards has pros and cons

YIANNIS PAPADOYIANNIS

TAGS: Banking, Finance

Taxpayers have paid taxes of almost 1 billion euros using credit cards this year, reflecting the growing difficulty people face in covering their living costs.

The main advantage of paying taxes via credit cards is that taxpayers can break their debt to the authorities down into 12 installments. This is why they choose to pay their income tax, Single Property Tax (ENFIA), road tax and value-added tax with plastic money.

Bank officials say that paying taxes via cards also delays taxpayers’ payments by up to a month before the first tranche is due to the bank that has issued the card, while there is no interest on the installments. However, in case the tranche is not paid to the bank in time, the interest charged is one of the highest in the market, at close to 20 percent.

This means that a significant portion of state revenues continues to constitute debt of the citizens, but instead of being owed to the state it is owed to the banks, and continues to burden family budgets for months.

What is more, the liquidity channeled by banks to the state for the payment of their clients’ taxes is deducted from the limited cash flow of the credit system, thereby reducing further the lenders’ capacity to finance the private sector.

It is noted that the state has also absorbed liquidity of 15 billion euros from the banking sector through treasury bills.

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