BUSINESS

Greek tax increases top OECD chart

PROKOPIS HATZINIKOLAOU

TAGS: Taxation

Greece is the last decade’s tax hike champion among the 35 member-states of the Organization for Economic Cooperation and Development, according to a new OECD report.

The report, which reflects the huge burden imposed on Greek taxpayers, shows that Greece remains the global leader not only in the sum of taxes but also in categories such as consumption taxation and property levies.

The OECD figures reveal that tax revenues in Greece increased by 8.2 percentage points of gross domestic product in the decade from 2007 to 2017, and even if one focuses only on the 2010-17 bailout program period there is a hike from 32 percent to 39.4 percent of GDP.

Another interesting element is that most countries in the world have been reducing their tax rates since 2014, in terms of both direct and indirect taxation, maintaining high revenues. Greece is the exception, as it has chosen to perform its fiscal adjustment through raising tax rates and not by curtailing its expenditure, the “Revenue Statistics 1965-2017” report showed.

Therefore, in Greece, especially in the period from 2015 to 2017 – and against the global trend – taxes and social security contributions increased disproportionately, making Greece the country with the steepest tax increase in that period, from 35.7 to 39.4 percent of GDP. Notably, even though GDP shrank by 25 percent over the last decade, tax revenues grew in absolute figures too in the previous couple of years, jumping from $71.6 billion in 2015 to $78.9 billion in 2017.

In the years 2016-2017, Greece ranked seventh in tax hikes, with taxes on incomes and corporate profits reaching 9 percent of GDP and accounting for 22.8 percent of all state revenues.

The hike in property taxation is more staggering: From around 600 million euros or 0.2 percent of GDP in 2010, revenues from property taxation had soared 516 percent – i.e. more than sixfold – by 2017 to reach 3.7 billion euros, or 2.1 percent of GDP.

Greece is also a leader in indirect taxation: The various levies on goods and services amounted to 15.4 percent of GDP last year, and to 39.1 percent of all tax revenues. This compares with 26.2 percent of revenues in Germany, 29.1 percent in Spain and 24.4 percent in France.

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