New taxes of 2.5 bln next year

Stronger-than-ex­pected ef­fect of fis­cal mea­sures has not con­vinced cred­i­tors to ease bur­den on tax­pay­ers

Kathimerini English - - Focus -

The final draftof the 2017 state bud­get, tabled yes­ter­day in Par­lia­ment, pro­vides for new mea­sures worth 3.3 bil­lion euros. The Fi­nance Min­istry fore­sees the new mea­sures, com­bined with the bet­ter-than-ex­pected per­for­mance of those im­posed this year, lead­ing to a pri­mary sur­plus of 2 per­cent of the gross do­mes­tic prod­uct in 2017, against a bailout agree­ment tar­get of 1.75 per­cent.

De­spite the ex­pec­ta­tion that the fis­cal mile­stone will be cov­ered, the gov­ern­ment has failed to per­suade its cred­i­tors not to force it to im­ple­ment the mea­sures agreed (in order to ease the fis­cal pres­sure on tax­pay­ers), as the bud­get to be voted on De­cem­ber 10 shows.

Greeks will have to pay ad­di­tional taxes of 2.5 bil­lion euros in 2017, com­ing both from the in­crease in in­come tax rates and from in­di­rect tax­a­tion on to­bacco, cof­fee, fuel, the in­ter­net, pay TV etc. The state will also have an ad­di­tional ben­e­fit of 843 mil­lion euros from slash­ing ex­pen­di­ture on pen­sions and so­cial ben­e­fits and rais­ing so­cial se­cu­rity con­tri­bu­tions.

On the other hand, the bud­get in­cludes so­cial pol­icy ac­tions worth 871 mil­lion euros: This con­cerns 571 mil­lion to fi­nance the Sol­i­dar­ity So­cial In­come and an­other 300 mil­lion whose pre­cise spend­ing is not spec­i­fied.

The pri­mary sur­plus pro­jected amounts to 3.6 bil­lion euros, against a tar­get for 3.1 bil­lion, thanks to the bet­ter-than-ex­pected per­for­mance of this year’s mea­sures, which has led the gov­ern­ment to ex­pect this year’s pri­mary sur­plus to close at 1.9 bil­lion euros, or 1.1 per­cent of GDP.

The final draft, de­bate on which will start in the House on De­cem­ber 6, con­tains a growth forecast of 2.7 per­cent for next year, against a 0.3 per­cent con­trac­tion this year. This 1.0631 is based on the forecast for in­creases of 9.1 per­cent in in­vest­ments, 1.8 per­cent in pri­vate con­sump­tion and 5.3 per­cent in ex­ports – all of which are seen by var­i­ous ob­servers and en­ti­ties as quite op­ti­mistic.

The bud­get also in­cludes an es­ti­mate for a re­turn to in­fla­tion, at an an­nual rate of 0.6 per­cent, fol­low­ing years of de­fla­tion, and a re­duc­tion of the un­em­ploy­ment rate to 22.6 per­cent from 23.7 per­cent this year.

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