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Tax payments eating into deposits
After a 16.8 pct drop in 2011, account balance is set to drop by a further 10 pct
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By Evgenia Tzortzi
Local banks are expecting a further decline in deposits by 10 percent or 17 billion euros within 2012, according to sources, as clients withdraw savings in order to cover their increased tax obligations. The same sources estimate that some 70 to 80 percent of the outflow from the banking system, which in 2011 amounted to 35.4 billion euros, was channeled into the state coffers through the various tax burdens imposed last year. By contrast, no more than 1 percent of deposits headed abroad. At the end of 2011 the deposits balance of corporations and households came down to 174.2 billion euros from 209.6 billion at end-2010, posting a 16.8 percent drop on an annual basis. Out of the 174.2 billion euros, 145.4 billion comprised household savings, which had slipped 28.1 billion euros compared to 2010, while corporate deposits amounted to 28.8 billion, down 7.2 billion euros from end-2010. Savings accounts posted a notable 19.9 percent decline on an annual basis. Bank data point to a fresh outflow of some 2 billion euros in January, as the monthly rise of 1.3 billion in the December balance was deemed temporary and attributed to money gong into accounts due to the Christmas bonus. This quickly evaporated last month, as households paid off their December expenditure conducted through credit cards. January also saw the deadline for the special property tax paid via electricity bills, while the process of legalizing illegally built houses is set to continue until the end of February. According to the 2011 state budget execution data, net revenues amounted to 50 billion euros at the end of the year, out of which some 12.8 billion was from income tax receipts, some 1.2 billion from property taxes and 28.6 billion euros from indirect taxes. Despite the lag observed in the execution of the budget regarding its targets, owing to the deeper-than-anticipated recession, the increase in revenues from a series of new taxes is obvious. For instance, property taxation revenues had come to just 487 million euros in 2010 and almost trebled last year. | 
