Tax increases during the Memoranda era

Tax increases during the Memoranda era

One of the key conclusions of the OECD Report “Revenue Statistics 1965- 2018” released today is that Greece had the highest tax increase as a percentage of its GDP during the 2008-2018 period, with this fact reaffirming the feeling that, during the Memoranda era, citizens faced rather heavy tax burdens.

Specifically, an increase of 6.9 percentage points was recorded, from 31.8% of GDP to 38.7%, which is attributed on one hand to the tax measures and on the other to the GDP plummeting by about 25 percentage points. As for the cases of other countries that went through the Memorandum adventure, in Portugal the increase was only 3.2 percentage points.

OECD data shows that Greece entered in 2010 the first Memorandum with total revenue of $ 95.9 billion in 2014; i.e in 2017, after 2 Memoranda, the figure fell to $ 85.3 billion; two financial packs later, it dropped to $ 79.1 billion, up from the $ 84.4 billion in 2018 and about $ 11.5 billion lower than when the crisis broke out.

Figures also show that in 2010 VAT revenues amounted to € 15,958 billion; they went through a free fall to reach € 12.8 billion in 2015; and in 2017 they climbed back up to approximately € 14.6 billion.

Another interesting finding of the OECD Statistical Report is that Greece is included in the 7 countries where employee retirement income exceeds 15% of total revenue. Overall, revenues from contributions accounted for 30.1% of total revenue and for 11.6% of GDP.

Such a comparative analysis could of course not exclude the burden on real estate. In 2010 these revenues amounted to 0.2% of GDP and now stand at 2% of GDP. The analysis, however, reveals even greater findings in absolute numbers. At the start of the crisis, property taxes amounted to € 553m; three years later they had sky-rocketed to € 2.6bn, and just before this year’s ENFIA reduction, they amounted to about € 3.6bn. /ibna