Tax revenues dry up as polls near

The repercussions of the upcoming elections, which could have been avoided, began as soon as they were announced last month, starting with the execution of the state budget, as revenues posted a major shortfall at the end of the year, close to 4 billion euros, driving the 3-billion-euro primary surplus off target, while revenue collections in the first 10 days of January came up all but empty. Taxpayers are seen to have simply stopped paying ahead of the vote.

Finance Ministry officials believe there will be no problem meeting the targets of the bailout program as far as the general government primary surplus, which amounts to 1.5 percent of gross domestic product for 2014, is concerned. There are, however, worries regarding the 2015 budget, as the year has got off to a terrible start in terms of revenue collections.

The target for January is 4.5 billion euros, but tax officials report that they saw no activity that would support that goal in the first 10 days of the month. Sources say that the decline compared to the first 10 days of 2014 ranges between 70 and 80 percent.

In December 2014 alone tax revenues missed their target by about 620 million euros, while for the whole of last year the shortfall amounted to 1.3 billion euros. Another negative factor was the decline in oil rates, which led to reduced revenues from fuel consumption.

Ministry data released on Wednesday showed that total budget revenues were off by 3.9 billion euros in 2014. Almost half of that (1.9 billion) concerned the fact that the Eurosystem’s profits from the Greek bonds it holds were not returned because Athens and its creditors have not yet completed the last assessment of the bailout program.

This means that the primary surplus amounted to 1.9 billion euros last year, against expectations for 4.9 billion that the 2015 budget had factored in. Now ministry officials are hoping that collections from the single property tax (ENFIA) and the settlement of debts to the state during the first couple of months of 2015 could improve the picture of 2014 revenues somewhat as they concern last year’s fiscal figures.