Greece trying to close VAT gap with EU
The government wants to “close the VAT gap we have between where we are and what the average European space is,” Deputy Finance Minister Harry Theoharis told the Greek Parliament’s Economy Committee during the discussion on the draft state budget for 2024.
“This means that by 2026 we must boost revenues, especially in VAT, by nearly 2 billion euros, after we already covered €2.5 billion toward closing the gap,” Theoharis said.
He also condemned the calls from the main opposition to reduce VAT or cancel the special consumption tax.
“We have a prudent fiscal policy that brings results. Last year we had a 0.1% primary surplus, when we expected a deficit. This year we are exceeding 0.7% of that state budget in primary surplus, and we are definitely at 1.1% of the medium-term budget, which was our target, therefore we are continuing in the last year of this great fiscal adjustment that will get us to the desired primary surplus of 2.1% for 2024,” Theoharis added.
In terms of a rise in revenues from property taxes – revenues of which are expected to be €160 million higher this year – he said it was attributed to the higher percentage of collectibility (by about 5 percentage points) of the Single Property Tax (ENFIA).
“Following the last ENFIA reform, the tax base expanded. There was a great rise in collectibility because citizens who could not pay ENFIA for years managed to pay last year’s ENFIA, coming in to settle some of what they owed. Therefore, the measures are effective,” the minister noted.
Overall, Theoharis said, the annual rise in revenues for 2023 by 9% “relates to tax compliance and the management of tax evasion.”
