Revenue drop points to more measures

Crumbling tax revenues have led to a drastic reduction in the primary budget surplus at the start of the year, as sources say that the difference between the general government budget revenues and expenditure in January shrank to just 300 million euros against 2 billion euros a year earlier.

The worse-than-anticipated start to the budget’s year has created major concerns not only at the Finance Ministry but also among the country’s creditors, pointing to the need for extra austerity measures over the course of the year. Sources say that even if the target for the 2015 primary surplus were eventually brought down from 3 percent to 1-1.5 percent of gross domestic product, the revenues situation would have to be rapidly reversed in order for the scenario of fresh measures to be averted.

The same sources say the revenues shortfall in the first couple of months of 2015 exceeded 1.5 billion euros in comparison with the budget target. However ministry officials consider it very difficult to change the situation which has arisen in the tax collection and monitoring mechanisms. They say that the business plan presented by the general secretary for public revenues is not applicable due to the inefficiencies of the tax collection mechanism.

For instance, one tax inspector who had been checking the so-called Lagarde list of possible tax dodgers said: “I just finished checks into a taxpayer on the list and there is tax evasion of 8 million euros there. However I cannot deal with the list any longer as I have also been assigned another 50 cases without any tax interest as their statute of limitations is at end-2015 and they have to be checked through.”

Furthermore it was officials of the current ruling party who had called on taxpayers not to pay their tax dues before the January 25 election, while the fear generated by officials of the current main opposition party drove taxpayers to a nonpayment policy, too, as they felt they should hold on to their cash.

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