BUSINESS

Social security contribution hike buoys budget

TAGS: Finance

The increased social security contributions paid this year by hundreds of thousands of workers in Greece are evident for the first time on the records of the Hellenic Statistical Authority (ELSTAT), which has found that an additional 287 million euros was paid in the first quarter of the year compared to the same period in 2016.

The rise in contributions and excessive containment of public expenditure, including a reduction by 475 million euros of social benefits, were the main drivers behind the primary budget surplus of 529 million euros in the January-March period reported by ELSTAT on Thursday.

Budget revenues mainly had social security contributions to thank for their increase from 18.07 billion last year to 18.13 billion euros this year, as tax takings from output and imports dropped from 5.845 billion in 2016 to 5.711 billion in 2017. Contributions rose from 6.155 billion to 6.442 billion euros. Revenues from income and property taxes shrank from 3.71 billion euros in January-March last year to 3.38 billion this year.

Total expenditure fell considerably from 19.92 billion euros to 18.98 billion, with social benefits sliding from 9.51 billion to 9.03 billion euros.

The general government debt also declined, from 314.9 billion euros at the end of the last quarter of 2016 to 310.6 billion in end-March. Still, a year earlier the debt had stood at 309.1 billion euros.

Friday, meanwhile, is the deadline for the submission of income tax declarations following two extensions granted by the Finance Ministry, with some 150,000 taxpayers yet to file their statements until late on Thursday.

Data processing from the six million-odd statements submitted until Thursday show that a record number of taxpayers will have to pay extra tax on top of what has already been withheld from them: They come to 2,457,365 (or 41.24 percent of all statements), up from 2,318,902 (or 37.95 percent) last year.

Major accounting firms report that there is a considerable hike in the tax due for taxpayers earning at least 35,000 euros per year, while lower incomes may see a small reduction.

Online