High tax takings are not enough, minister admits

High tax takings are not enough, minister admits

Tax revenues have again exceeded their target, according to October’s figures, but, as Alternate Finance Minister Giorgos Houliarakis admitted on Thursday, that is not the solution for Greece’s wheezing economy, while he added that even a debt settlement will not suffice to see Greece emerge from its crisis.

During a speech at a parliamentary committee on the national debt, Houliarakis argued that the reduction of the debt is neither a cure nor evil, but an important step on the path to Greece’s exit from the crisis.

“It is very important – even if the medium-term measures are not implemented immediately but at the end of the program – that the parameters of those measures are calculated from now,” said the minister. He added that the Greek side is proposing that the necessary fiscal space be granted for the reduction of both corporate income tax rates and social security contribution rates.

The alternate minister called for a “credible commitment that the benefits to stem from a reduction in the primary surplus targets will lead to the bolstering of economic activity and a virtuous cycle in the Greek economy, to the benefit not only of Greece but also of Europe.”

His ministry announced on Thursday that the primary budget surplus exceeded its target for the first 10 months of the year by 2.32 billion euros, which is attributed to the increased revenues from value-added tax and the payment of the second installment of the Single Property Tax (ENFIA).

The increase is also attributed to the growth in the use of credit and debit cards by taxpayers, bringing part of the illegal economy back above ground.

In October alone, net state revenues exceeded their target by 21.37 percent, coming to 4.72 billion euros, after tax rebates worth 268 million euros were paid out.

A senior ministry official said that the above data have been sent to the country’s creditors and they estimate that budget revenues will eventually prove to be smaller than the ministry’s expectations.

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