ECONOMY

Tax hikes failed to raise takings

tax-hikes-failed-to-raise-takings

The storm of fiscal measures introduced in the second half of 2015 hurt salary workers and pensioners considerably, as they were forced to pay 11.02 percent more tax than a year earlier through the monthly withholding process, according to a report on 2015 tax revenues drafted by the General Secretariat of Public Revenue.

At the same time, the changes to the value-added tax rates that brought hikes for most food items, taxi fares and a multitude of other commodities and services led to just a marginal increase in takings by 0.09 percent, or 12 million euros, for 2015 with the total level of VAT revenues at 13.6 billion euros.

Budget revenues are in negative territory in most categories, with the only exception being salary workers and pensioners. The biggest shortfall was in income tax revenues from taxpayers and in property taxation.

The total figure for indirect and direct tax revenues last year showed a drop of 610.5 million euros (or 1.38 percent) compared to 2014 takings, even though nine tough tax measures worth a total of 1 billion euros were implemented during 2015. The new measures after July 2015 may have prevented the complete collapse of budget revenues, but have increased expired debts to the state.

Direct taxes account for the entire revenues deficit seen last year, as direct tax takings fell by 611.1 million euros, or 2.99 percent, from 2014. The data showed that the decline is attributed to the 8.46 percent slump in property tax takings (that account for 16 percent of all revenues), the 11.79 percent fall in revenues from direct taxes from previous years and the considerable 20.92 percent contraction in revenues from fines and penalties for the delayed payment of direct taxes.

Revenues missed the original targets of the 2015 budget by a long shot and only achieved the adjusted targets made in view of the financial problems the country faced during the year: Direct tax revenues added up to 19.84 billion against an original target for 21.88 billion, while indirect taxes fetched 23.77 billion euros against a target for 25.13 billion in the 2015 budget.