Taxation in Greece was “hard” during the years of the memorandums

Taxation in Greece was “hard” during the years of the memorandums

Greek governments have made a steep increase in taxation in the years of the crisis, as illustrated by the OECD report. Data included in the Revenue Statistics report 1965-2017 show that taxes on income and earnings accounted for 9% of GDP in 2017 and accounted for 22.8% of the total government revenue. At the same time, taxes on goods and services reached 15.4% of GDP or 39.1% of total taxes.

At the same time, in Germany, indirect taxes accounted for 26.2% of revenue last year, 29.1% in Spain, 24.4% of revenue in France and the eurozone. Only Portugal exceeds Greece, with indirect taxes at 39.8% of the total tax revenue.

In the total tax burden, in 2017 Greece scores 39.4% of GDP when the OECD average is 34.2% of GDP.

In particular, in the period 2007-17, the increase in taxes in Greece was of the order of 8.2 points of GDP, while during the Memorandums, tax revenues increased from 32% to 39.4% of GDP. In the meantime, GDP fell by 25% when tax revenue from USD 95.9 billion in 2010 was USD 71.6 billion in 2015 and skyrocketed to USD 78.9 billion in 2017.

Taxes on real estate went six times over

Beyond that, in 2010 real estate taxes accounted for only 0.2% of GDP or close to EUR 600 million. The latest data for 2017 shows real estate taxes six times over in absolute terms, at EUR 3.7 billion.

Huge rise in 50 years

It is worth noting that in 1965, Greece had tax revenues of 17.1% of GDP when the average in the OECD was 24.9% and was one of the three countries with the lowest tax burden. Twenty years later, in 1995, it was again below the average of the 34 OECD countries (25.2% vs. 31.9%).

In 2010, Greece was at the OECD average with a 32% performance. In 2012 it went up to  35.5%, in 2014 with a small increase it reached 35.7% of GDP and finally, in 2017 it stood at 39.4% of GDP./IBNA