High tax tak­ings are not enough

Hou­liarakis ad­mits that suf­fer­ing econ­omy needs cuts in tax­a­tion and so­cial se­cu­rity con­tri­bu­tions

Kathimerini English - - Focus - BY SOTIRIS NIKAS & PROKOPIS HATZINIKOLAOU

Tax rev­enues have again ex­ceeded their tar­get, ac­cord­ing to Oc­to­ber’s fig­ures, but, as Al­ter­nate Fi­nance Min­is­ter Gior­gos Hou­liarakis ad­mit­ted yes­ter­day, that is not the so­lu­tion for Greece’s wheez­ing econ­omy, while he added that even a debt set­tle­ment will not suf­fice to see Greece emerge from its cri­sis.

Dur­ing a speech at a par­lia­men­tary com­mit­tee on the na­tional debt, Hou­liarakis ar­gued that the re­duc­tion of the debt is nei­ther a cure nor evil, but an im­por­tant step on the path to Greece’s exit from the cri­sis.

“It is very im­por­tant – even if the medium-term mea­sures are not im­ple­mented im­me­di­ately but at the end of the pro­gram – that the pa­ram­e­ters of those mea­sures are cal­cu­lated from now,” said the minis- ter. He added that the Greek side is propos­ing that the nec­es­sary fis­cal space be granted for the re­duc­tion of both cor­po­rate in­come tax rates and so­cial se­cu­rity con­tri­bu­tion rates.

The al­ter­nate min­is­ter called for a “cred­i­ble com­mit­ment that the ben­e­fits to stem from a re­duc­tion in the pri­mary sur­plus tar­gets will lead to the bol­ster­ing of eco­nomic ac­tiv­ity and a vir­tu­ous cy­cle in the Greek econ­omy, to the ben­e­fit not only of Greece but also of Europe.”

His min­istry an­nounced yes­ter­day that the pri­mary bud­get sur­plus ex­ceeded its tar­get for the first 10 months of the year by 2.32 bil­lion eu­ros, which is at­trib­uted to the in­creased rev­enues from value-added tax and the pay­ment of the sec­ond in­stall­ment of the Sin­gle Prop­erty Tax (ENFIA).

The in­crease is also at­trib­uted to the growth in the use of credit and debit cards by tax­pay­ers, bring­ing 578.23 1.1064 part of the il­le­gal econ­omy back above ground.

In Oc­to­ber alone, net state rev­enues ex­ceeded their tar­get by 21.37 per­cent, com­ing to 4.72 bil­lion eu­ros, after tax re­bates worth 268 mil­lion eu­ros were paid out.

A se­nior min­istry of­fi­cial said that the above data have been sent to the coun­try’s cred­i­tors and they es­ti­mate that bud­get rev­enues will even­tu­ally prove to be smaller than the min­istry’s ex­pec­ta­tions.

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