BUSINESS

Declared incomes tumbled by 2.5 bln euros in a year

PROKOPIS HATZINIKOLAOU

TAGS: Finance

Greeks’ declared incomes shrank by over 2.5 billion euros in a year from 2015 to 2016, as the earnings that salary workers, pensioners, freelance professionals and property owners declared in June for the 2016 financial year amounted to 72.5 billion euros, against 75.01 billion euros for the previous year, the processing of this year’s tax statements has shown.

Overtaxation has evidently sent tax evasion soaring, as well as leading to the termination of activity for tens of thousands of freelance professionals. The fear of high social security contributions has resulted in many freelancers and the self-employed hiding incomes to avoid having to pay more to the tax authorities and social security funds.

It is no coincidence that the number of freelancers declined by about 58,000 last year compared to 2015, while another 20,000 salary workers and pensioners vanished.

The reduction of the tax-free threshold and the increase in the burden from the new solidarity levy rates and property taxation rates have led to a drastic contraction of incomes.

Furthermore, the new method of calculating social security contributions, which was already known from 2016, has made things worse, as taxpayers with business activities tried to conceal takings in an effort to be spared having to pay additional taxes and contributions. Data show that the category of freelance professionals declared incomes for 2016 that lagged those of 2015 by a remarkable 18.9 percent: Their stated earnings added up to 3.78 billion euros against 4.67 billion a year earlier.

This development has prevented the further growth of state revenues, following the processing of declarations in June; despite the considerable increase in taxation, state takings were below the level of 2015, at 3.41 billion euros from 3.46 billion.

The problem is that the income statements freelancers and the self-employed have made this year have formed a low starting point that is set to affect state revenues and fiscal figures in the next few years too.

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