Greece Faces Further Revenue Losses

February 8, 2013 Taxation in Greece

GreeceATHENS – Greece is running the risk of jeopardising its debt repayment commitments and loan agreements with the EU as tax revenues in the country continue to shrink and reach perilously low levels.

In a press release published on February 7th the Greek Ministry of Finance announced that tax revenues in January had fallen by 16 percent compared to the previous year.

Total tax revenues for thee month of January were EUR 4.05 billion, while the target for the month was approximately EUR 420 million higher at EUR 4.36 billion.

According to the Finance Ministry, the drop in tax revenues can be attributed to a drop in consumer spending, which lead to a 15 percent decrease in the collection of VAT and other consumption taxes.

Despite the drop, the Ministry did report an increase in the collection of direct taxes and property taxes which rose 10 percent and 100 percent respectively.

In an effort to boost the overall tax revenues for the rest of the year, the government will soon begin talks with the national tax authority to investigate new means and programs to collect previously expired tax debts from taxpayers in the country.

If the tax revenues in Greece continue to fall below target, the country runs the risk of triggering the automatic budget cuts and spending reductions which are part of the country’s loan agreements with the EU and International Monetary Fund.

Photo by caribb