Worrying signs from tax revenues

Worrying signs from tax revenues

The Finance Ministry has heard the first alarm after the publication of May’s tax revenue analysis, showing that all main sources of takings have missed their target, putting the budget balance at risk.

Data showed on Monday that total revenues from direct and indirect taxes in the month of May amounted to 3.06 billion euros, 9.84 percent less than May 2017 and 3.15 percent below the budget target.

On a five-month level tax revenues are still slightly above the target, but the trend is clear for a reduction compared to previous years. This is due to the drop in collections from the tax imposed on self-employed professionals, a number of whom have closed their books since last year in order to avoid the high taxation and heavy social security contributions.

At the same time there was a reduction in takings from indirect taxes, particularly value-added tax and consumption taxes: Data point to indirect tax revenues posting an annual reduction of 11.97 percent, from 2.32 billion euros last year to 2.04 billion this year.

The big challenge for the Finance Ministry at this stage is whether it will manage to collect the additional income tax demanded of millions of taxpayers from this month: By the end of July the first tranche of some 1.1 billion euros will be due, while the other two are set for late September and late November.

Yet what concerns the ministry at this stage is the amount to stem from the processing of the income tax declarations: At the moment 2.24 million taxpayers are due to pay additional tax of 2.59 billion euros. At the same time last year some 2.46 million taxpayers were asked to pay 3.38 billion euros. At the end of the processing 2.6 million taxpayers were due to pay 3.87 billion euros.

That signifies a difference of some 1.28 billion euros which will have to be covered by the deadline day for the submission of tax statements on Thursday. If this distance is not covered, the processing of the declarations will highlight the reduction of Greek taxpayers’ incomes compared to what was declared a year earlier.

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.