Paying dearly for poor services
Greeks charged taxes that rival those in Scandinavian countries but provided with inferior benefits in return
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.