SMEs struggling to stay afloat

SMEs struggling to stay afloat

Small and medium-sized enterprises may have seen an improvement in the first half of the year, but a number of them remain in a dire situation, according to a survey released on Thursday by the Small Enterprises Institute of the Hellenic Confederation of Professionals, Craftsmen & Merchants (GSEVEE).

SMEs find themselves in a difficult position due to excessive taxation and social security contributions, and because of their lack of liquidity and overdue arrears to the private sector, the social security funds and the tax authorities.

GSEVEE’s biannual survey reflecting economic sentiment among SMEs showed that despite the improved business position of about one in seven enterprises (13.8 percent), almost half (47.7 percent) recorded a decline in turnover. Among them the self-employed (58.6 percent) and companies in the commerce sector (58.8 percent) reported the greatest losses.

The inability of SMEs to stage a full recovery is also reflected in their taxable earnings, as they amounted to between 5,000-20,000 euros for 25.4 percent of businesses, while 19.1 percent made profits of less than 5,000 euros last year. Another 13.1 percent recorded losses or no earnings at all in their tax declaration. This confirms that the high taxes are eating into companies’ profits and points to possible tax evasion through the concealment of real incomes.

That heavy tax and social security contribution load has forced 45.4 percent of small and very small employers to offer only part-time employment, and 36.2 percent stated they would only hire staff part-time in the coming period.

Another important finding of the survey concerns SMEs’ expired dues, as 37.3 percent of them have overdue arrears of various forms.

During the survey’s presentation, GSEVEE president Giorgos Kavvathas said the confederation “is in favor of increasing the minimum wage through a process where the main role will belong to the social partners.”

He added that such a move should be accompanied by the raising of the tax-free ceiling for salary workers, a reduction in the value-added tax rate on food service and a drop in companies’ salary costs.

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