ECONOMY

Parafiscal charges head for a cut

A committee set up by the General State Accounting Office is to submit a proposal for the abolition of nearly all of the 199 parafiscal charges on a wide variety of products and services.

Their abolition will aggravate the revenue problem being faced by social security funds as it will mean a reduction in annual revenues by an estimated 800 million euros, likely becoming an additional burden on the state budget.

Nevertheless these 199 hidden taxes, which do not raise revenues for the central government, include several that are lacking in transparency and others from which revenues are often found to be inefficiently distributed. The task of the new committee is to assess the data on parafiscal charges collected by various corporations and ministries, and to draw up recommendations for the political leadership of the Finance Ministry regarding their “gradual rationalization in a fiscally neutral fashion starting from the 2014 budget,” according to a decision by Alternate Finance Minister Christos Staikouras.

As things stand, the majority of parafiscal charges will be abolished, while those to be kept will be included in the state budget. It will therefore be up to the government to centrally decide on the allocation of the revenues to the various corporations and other entities depending on their requirements, after the submission of plans regarding the utilization of those resources.

Officials stress that a number of these levies serve no real purpose. They cite the example of 2 euros paid to the Church from each marriage or divorce license issued as well as a part of ticket revenues from team sport events that goes to police social security funds.