ECONOMY

State revenues in sight of goal

State revenues from a tax amnesty scheme and hike in value-added tax helped boost income in the first 11 months of 2010, placing the government closer to its goals for the first time this year. The Finance Ministry is some 375 million euros short of its fiscal targets for the January to November period and will need to earn 6 billion euros in the last month of the year if it wants to meet 2010 goals. In December last year, when the recession was not as severe as it is now, the government collected 5.2 billion euros in revenues. According to provisional figures from the Finance Ministry, net revenue in November rose by an annual pace of 18 percent to 4.5 billion euros. At the same time, revenues from VAT increased 10.4 percent over the same period last year. For the 11-month period, revenues rose 5.1 percent, versus the 6 percent annual target, to 45.5 billion euros. Greece’s initial target for annual revenue growth stood at 13.6 percent. A deepening recession and poorly organized tax collection services forced the government recently to introduce further ways to boost income, such as offering taxpayers the right to pay for amnesty from possible future audits. Without the money from the tax amnesty, income in November would have reached 3.8 billion euros, some 50 million euros higher than the same month last year, despite a recent rise in the VAT rate to 23 percent from 19 percent in 2010. Ministry sources believe that December will be a difficult month to collect state revenues due to plunging consumption. Cuts in allowances and salaries paid to public sector workers, along with other financial obligations that are paid to the state in December, such as road tax, have taken away from the resources consumers have to spend for the Christmas period.