High pension contributions, indirect taxes

Greek employers’ and workers’ social security contributions and the country’s total taxation burden have moved in opposite directions in recent years in relation to total public revenue, according to data published yesterday by Eurostat, the Commission’s statistical service, for 2003. Social security contributions were among the highest in the European Union, representing 39.5 percent of public revenues – up from just 34 percent in 2000. They were the third highest in the old 15-member EU after Germany’s 44.4 percent and France’s 40.2 percent, and the fifth highest in the Union after enlargement. The average in the EU is 34.5 percent and in the eurozone 38.2 percent. At the same time, the share of direct and indirect taxation in Greek public revenue in 2003 dropped to 23.3 percent and 37.2 percent respectively, from 27.4 percent and 38.6 percent in the previous year. Thus, the country’s total taxation burden fell from 39.8 percent of gross domestic product (GDP) in 2002 to 38.6 percent in 2003, when the EU average was 41.5 percent and the eurozone’s 42.2 percent. The rate for Greece was 34.7 percent in 1995. Lithuania and Latvia have the lowest taxation burden in the 25-member EU as part of GDP (29 percent) and Sweden the highest (51 percent). As a whole, the figures show that Greece has among the highest indirect taxation rates and social security contributions, while its direct taxation is at relatively low levels. Separately, Eurostat released data on the average per capita income of all EU regions for 2000-2002 on which the distribution of investment subsidies through the Structural Funds will be based in the 2007-2013 period. The Greek regions that would be eligible according to the criterion of a per capita income under 75 percent of the EU average, and pending agreement on the fiscal prospects for the period, are western Macedonia and Thrace, Thessaly, Epirus, the Ionian islands, western Greece, the Peloponnese, the northern Aegean and Crete.