ECONOMY

Tax revenues up 6 percent

The government’s decision to go after small and medium-sized enterprises for VAT taxes in order to boost the state coffers paid off handsomely, helping to lift revenues in the first five months of the year. Total ordinary budget revenues in the January-May period increased by 6 percent year-on-year to 15.83 billion euros, the Finance Ministry announced yesterday. This is compared with the annual revenue growth target of 6.1 percent projected for 2002. Regular revenues rose by 7.6 percent to 14.9 billion euros, boosted by the higher value-added-tax yield. The Finance Ministry has been cracking down on SMEs to pay up their VAT in return for not probing into their books for the last three years, a strategy which helped to improve the takes. VAT revenues rose by 12.8 percent in the first five months of the year, exceeding other components. Income taxes went up by 6.1 percent, while the volatile stock market continued to cast its pall on stock brokerages and investors, resulting in a massive 49.4-percent decline in the tax yield on share transactions to 41 million euros. Exceptional revenues were down by 15 percent, the ministry said, with a 469-million-euro gain from the launch of euro coins cancelled out by the State’s decision to bring forward this year’s payment of road taxes by a year. The elimination of a number of stamp duties and the tax on banking transactions last year, in line with the government’s efforts to revamp the tax system, had a negative impact on the state coffers. The ministry yesterday also unveiled plans to streamline the tax system by capping the period under which companies would be subject to the tax office’s scrutiny to three years from the current 10 years. It said the move would allow companies to focus on their business. Fischler wants to scrap some 460 million euros in aid planned over the next four years to build new vessels or modernize old ones. He wants to use the money for alternative employment possibilities for fishermen.