Taxes have re­duced rev­enues and raised com­mod­ity prices

Kathimerini English - - Focus - BY DIMITRA MANIFAVA

In­ter­nal de­val­u­a­tionin Greece mainly con­cerns salaries and not the prices of com­modi­ties, the In­ter­na­tional Mon­e­tary Fund said in a re­cent re­port, suggest­ing that liv­ing in this coun­try has be­come much more ex­pen­sive due to the de­cline of in­comes and in­creases in taxes.

“The bur­den of ad­just­ment has fallen dis­pro­por­tion­ately on wage earn­ers,” notes the IMF’s ex­ec­u­tive board re­port on the Greek econ­omy pub­lished on Fe­bru­ary 6. Mean­while, data from the Euro­pean sta­tis­ti­cal ser­vice, Euro­stat, for the 2008 to 2017 pe­riod re­veal the pres­sure lower salaries have come un­der: Greece is the only Euro­pean Union mem­ber-state with a “na­tional min­i­mum salary” that has been re­duced in com­par­i­son with 2008, and by 14 per­cent at that.

More­over, fig­ures from the So­cial Se­cu­rity Foun­da­tion (IKA) pre­vi­ously pre­sented by Kathimerini show 550,000 work­ers bring home an in­come that is be­low the min­i­mum salary. At the same time the price level in Greece amounts to 85 per­cent of the mean rate in the Euro­pean Union, while gross do­mes­tic prod­uct per capita in Pur­chas­ing Power Stan­dards stood at just 68 per­cent of the EU av­er­age in 2015, down from 94 per­cent in 2009.

The pic­ture in Greek house­holds is equally bleak when we look at Ac­tual In­di­vid­ual Con­sump­tion (AIC), which records the goods and ser­vices house­holds have con­sumed re­gard­less of whether this was paid for by the pri­vate or the state sec­tor. In 2009 this in­dex stood at 106.5 per­cent of the EU av­er­age, drop­ping to 77 per­cent to­day.

Hikes in indi­rect taxes have trig­gered price hikes on dozens of prod­ucts and ser­vices, eating fur­ther into house­holds’ in­comes. In Jan­uary, the Hellenic Sta­tis­ti­cal Au­thor­ity (ELSTAT) recorded price rises in fruit, veg­eta­bles, olive oil, pota­toes and cof­fee, among other com­modi­ties. The hike in cof­fee is out­stand­ing, as af­ter the im­po­si­tion of a spe­cial con­sump­tion tax from Jan­uary 1, a pack of 200 grams by a lead­ing brand that cost 5.70 eu­ros in De­cem­ber, now costs 6.68 eu­ros, an in­crease of 18 per­cent.

Taxes, com­bined with the rise in the in­ter­na­tional oil rates, have also in­creased the cost of heat­ing and trans­port in Greece: Heat­ing oil in par­tic­u­lar rose 36.8 per­cent in Jan­uary 2017 com­pared to a year ear­lier.

In Jan­uary, the Hellenic Sta­tis­ti­cal Au­thor­ity recorded price hikes in fruit, veg­eta­bles, olive oil, pota­toes and cof­fee, among other com­modi­ties.

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