Meeting an ambitious and memorandum-mandated 3.5-percent primary budget surplus target until 2022, which the Greek government recommitted to during last week’s Eurogroup meeting, will require a yearly increase in revenues flowing into state coffers from indirect taxes that reach an extra 3.5 billion euros in 2022 from the current annual collection.
Based on current figures and forecasts, the fiscal target until 2022 is based on increased and new indirect taxes implemented in 2016, in tandem with higher consumption. Last year’s “tax tsunami” awaits one more measure as of 2018, a high unpopular surcharge on hotel overnight stays.
The same fiscal target drops to 2 percent after 2022 for nearly another four decades.
Indirect taxes – VAT, hefty fuel surcharges, “sin taxes”, flat fees on everything from mobile phone use to subscriber television and others – generated 27.108 billion euros in 2015 and 29.311 billion in 2016. The 30-billion-euro threshold will have to be exceeded in 2017 and every subsequent year in order to meet the primary budget surplus target.
Specifically, the goal for indirect taxes collected by the Greek state is 30.7 billion euros in 2018; 31.349 billion for 2019; 31.829 euros billion for 2020; 32.5 billion for 2021 and 33.5 billion euros in 2022.
Nevertheless, a higher figure for indirect taxes depends on higher consumption – along with lower rates of tax evasion — something intrinsically linked to a Greek economic recovery on all fronts.
