Specifically, in 2023, the state budget collected tax revenues of approximately 61.95 billion euros, while the previous year’s budget began with an estimated revenue of 54.6 billion euros. In fact, from this increase the additional revenue from VAT was approximately 2 billion euros, reaching a total of 23.3 billion from 21.3 billion which was the initial forecast.
Because inflation fell from 9.2% in 2022 to 4% in 2023 the “gain” from the VAT on higher prices did not exceed €1 billion, while €1 billion was the gain from the increase in private consumption and reduction of unemployment, i.e. from “healthy” sources. The remaining €5.5 billion of the year-on-year increase in tax revenue came from direct taxes.
The “mystery” of this constant upward revision of tax revenues almost every quarter of the previous year can be explained by the fact that 2023 was a back-to-back election year in which there was (as in every similar occasion) a bidding rally, mainly by the opposition side. The economic staff, facing a negotiation on the new fiscal rules and aiming to achieve a primary surplus of 1.1% of GDP, presented a package of measures in line with the conservative forecasts it had made for tax revenues. In retrospect, as the higher revenues were incorporated, the primary surplus reached 1.9% of GDP, not including the €1.2 billion in additional extraordinary spending provided for the natural disasters of Storm Daniel ” and the Evros fires and led to two revisions of budget expenditures.
The positive messages
The positive signals for this year’s revenues have already come, based on the final budget execution figures. The “net” excess of tax revenues in the first half of the year reached 620 million euros and is due to the excess of indirect taxes (VAT, VAT) by 430 million euros and by 250 million euros from direct taxes. The excess of indirect taxes, given the decline in inflation and gradually also in prices, indicates faster GDP growth. It should be noted that this excess of tax revenue is recorded before the payment of direct taxes begins, since, after successive extensions in the submission of tax returns, they will start to be paid from August.
However, the completion of the filing of the declarations sent very positive messages, since the assessed tax for natural persons reached 4.5 billion euros, which is a record, from 3.8 billion euros that was in 2023. Also the tax for legal entities are expected from 5.5 billion euros in 2023 to exceed 6 billion euros this year, due to the course of the market in 2023.
Where will the excess come from?
– From the new record of receipts in tourism, the development of the economy and some collection interventions, totaling 1.2 billion, which have been instituted since the end of last year.
– From the taxes of legal entities, which will yield in direct taxes more than expected based on the results of the companies in 2023.
– A large part of the revenue excess will concern indirect taxes, due to expectations for a new record revenue in tourism which is expected to exceed 21 billion euros against 19.5 billion euros in 2023.
– An unspecified amount is expected as a return on the anti-tax evasion campaign that has been launched since the end of 2023 with intensified controls and an increase in electronic transactions. This is without taking into account the additional “net” tax of 530 million euros expected from the presumptive taxation of the self-employed.
In addition, for 2024, there is a “certain” additional revenue of €1.2 billion due to interventions instituted at the end of the previous year. The first is the presumptive way of taxing the incomes of the self-employed which is expected to bring in additional revenues of 532 million euros. The second intervention is the increased overnight stay fee in tourist accommodation so that there is revenue to cover damages from natural disasters. With conservative estimates, the fee increase will bring additional revenues of 650 million euros. Given that the amount has been calculated based on last year’s tourist traffic, if we have a better than expected course of tourism and higher revenues, we will also have more revenues from the increase in the overnight stay fee. Already the first revenues from the fee that have entered public coffers in July give rise to optimism that initial estimates may be exceeded.
The taxation of electricity providers
Recently, the issue of taxing the surplus profits of energy producers was also brought to the table with the aim of securing resources to subsidize electricity tariffs. The extraordinary taxation is expected to generate additional revenue of approximately 250 million euros, which will be shared as a subsidy. However, this money will also be added to the tax revenue account from this year.
In fact, government sources leave open the possibility that the subsidy on electricity bills will continue as long as prices are high. Therefore, the taxation of electricity providers will also continue.
But in addition to the known or new sources of tax revenue, the public treasury will also benefit from the increase in tax compliance of citizens, who regularly pay taxes at a rate of 83% compared to 78% three years ago. In addition to the timely payment of certain obligations, tax compliance also contributes to the avoidance by taxpayers of any type of regulation.
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