Pay­ing dearly for poor ser­vices

Greeks charged taxes that ri­val those in Scan­di­na­vian coun­tries but pro­vided with in­fe­rior ben­e­fits in re­turn

Kathimerini English - - Focus -

Greeks pay sim­i­lar tax rates to the Scan­di­na­vians but re­ceive in­fe­rior ser­vices in re­turn, the Hel­lenic Fed­er­a­tion of En­ter­prises (SEV) noted in its weekly bul­letin.

The fig­ures pre­sented in the bul­letin show that to­tal state rev­enues from taxes and so­cial se­cu­rity con­tri­bu­tions are 4 per­cent­age points of gross do­mes­tic prod­uct higher than the Euro­pean Union aver­age. At the same time to­tal non-salary ex­pen­di­ture des­tined for the pro­vi­sion of pub­lic ser­vices in ed­u­ca­tion, health­care, de­fense, pub­lic or­der, jus­tice, tax and cus­toms, bridge and road main­te­nance, pub­lic trans­port etc is five per­cent­age points lower than the EU aver­age.

On the other hand, Greeks spend more than the EU aver­age on in­ter­est (1.5 per­cent­age points of GDP), pen­sions and so­cial ben­e­fits (3.5 per­cent of GDP) and salaries (2 per­cent of GDP).

“The real in­dex of a coun­try’s wel­fare is to a great ex­tent re­lated to the qual­ity and quan­tity of pub­lic ser­vices sup­plied to its cit­i­zens. When you over­tax la­bor and en­ter­prises with­out re­turn­ing pub­lic goods of a cor­re­spond­ing level, there is an un­sus­tain­able re­la­tion­ship cre­ated be­tween the econ­omy, the cit­i­zens and the state,” SEV com­ments in its bul­letin.

Ac­cord­ing to AMECO data for 2017 cited by SEV, to­tal state rev­enues came to 48.8 per­cent of GDP against an EU aver­age of 44.9 per­cent, with tax rev­enues amount­ing to 27.5 per­cent of GDP against an aver­age of 26.5 per­cent in the EU. Greek so­cial se­cu­rity rev­enues were 14.6 per­cent of GDP com­pared to an EU aver­age of 13.3 per­cent. Other state rev­enues, which in­clude the in­flow of EU sub­si­dies, stood at 6.7 per­cent of GDP, against an aver­age of 5 per­cent in the EU’s 28 mem­ber-states.

There are just six EU coun­tries that have higher tax tak­ings than Greece’s, three of which are Scan­di­na­vian (Den­mark, Swe­den and Fin­land), plus Bel­gium, France and Italy.

Cit­ing a re­cent es­ti­mate by the Fi­nance Min­istry that the coun­try’s il­le­gal econ­omy amounts to 35 bil­lion eu­ros per year, SEV high­lights the need for ra­tio­nal­iz­ing taxes and ex­pand­ing on­line trans­ac­tions to com­bat tax eva­sion.

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