Fears of rev­enue short­fall

Gov’t con­cerned new con­tri­bu­tions sys­tem for self-em­ployed will fuel tax eva­sion

Kathimerini English - - Front Page -

De­spite their pub­lic ex­pres­sions of op­ti­mism for the prospects of bailout talks and eco­nomic re­cov­ery, gov­ern­ment of­fi­cials pri­vately cite con­cerns that au­thor­i­ties might fall short of rev­enue tar­gets re­lated to new pen­sion and tax re­forms, Kathimerini un­der­stands.

The con­cern stems in par­tic­u­lar from a new sys­tem of cal­cu­lat­ing the so­cial se­cu­rity con­tri­bu­tions owed by self-em­ployed pro­fes­sion­als which will use real tax­able in­come as the ba­sis for the cal­cu­la­tions.

There are fears that the new re­form will lead to higher rates of tax eva­sion and more peo­ple con­ceal­ing the level of their in­come.

Of­fi­cials es­ti­mate that 80 per­cent of self-em- ployed pro­fes­sion­als such as lawyers and en­gi­neers will pay the same or less tax than they did un­der the pre­vi­ous sys­tem. But it is the other 20 per­cent – the high­est earn­ers – that the gov­ern­ment is wor­ried about as the new sys­tem aims to im­pose the greater bur­den on them.

Gov­ern­ment of­fi­cials are also said to be wor­ried about meet­ing the pri­mary sur­plus tar­get for this year which, at 1.75 per­cent of gross do­mes­tic prod­uct, is am­bi­tious and will re­quire tough fis­cal dis­ci­pline that will not go down well with the pub­lic fol­low­ing the in­tro­duc­tion of new taxes, in­clud­ing levies on fuel and cof­fee.

Prime Min­is­ter Alexis Tsipras and his aides have in­sisted that the gov­ern­ment’s pri­or­ity is to kick-start bailout talks so that a re­view by for­eign in­spec­tors can be wrapped up in the com­ing weeks.

Yesterday, op­po­si­tion New Democ­racy’s eco­nomic pol­icy chief, Chris­tos Staik­ouras, ac­cused Fi­nance Min­is­ter Eu­clid Tsakalo­tos of “dou­ble­s­peak” and “ir­re­spon­si­bil­ity.” He said Tsakalo­tos signed three doc­u­ments that are detri­men­tal to the Greek peo­ple: a state bud­get that in­cludes higher taxes, a Eurogroup agree­ment for new mea­sures from 2018 and high pri­mary sur­pluses, and a let­ter to cred­i­tors ex­press­ing the gov­ern­ment’s “full com­mit­ment to re­main com­pli­ant with our obli­ga­tions.”

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