Primary surplus remains a long shot
The Finance Ministry is aiming to collect 17 billion euros by the end of the year in a bid to meet the challenge of securing a primary surplus for the 2013 budget. This means that it will have to collect 4.26 billion euros every month until year-end, while in the first eight months of the year the average monthly intake amounted to 3.4 billion euros.
The course of revenues is the biggest concern of the county’s creditors – the representatives of the European Commission, the European Central Bank and the International Monetary Fund, collectively known as the troika – both for this year’s budget and for that of 2014, which is currently being drafted.
Out of the 17 billion euros that has to be collected, 8.27 billion should come from direct taxes and the other 8.8 billion from indirect taxation. Ministry officials acknowledge that the effort to bring in such high amounts will be difficult and that both the state’s mechanisms and taxpayers will need to realize how critical the situation is and adhere to their obligations.
The same sources anticipate that the target for tax rebates of 2.9 billion euros for 2013 will not be met. The latest ministry data reveal that just 1.16 billion has been returned to taxpayers and corporations, against a target for 1.8 billion for this part of the year. It will be extremely difficult to return another 1.8 billion euros by the end of the year to make the target, they say.
That may help the ministry plug part of the hole in the revenues but will become an additional problem for 2014, as delaying tax rebate for more than 90 days requires the payment of interest, too, according to new legislation.
Indirect tax collection fetched 15.6 billion euros up until the end of August, and if the same collection rate is retained until the end of the year the indirect taxation target will be met. However, the multiple tax obligations to burden Greeks in the last quarter of the year are likely to throw revenues from indirect taxation off course as consumption may well drop even further.
Nevertheless, there is optimism for the expenditure side of the budget: By the end of August, no more than 65 percent of planned spending was implemented, which means that the state will not need to reach 100 percent by end-December, offering a cushion of 1.5-2 billion euros.
