Improvement noted in tax compliance
Greeks displayed a significant improvement in tax compliance last year, partly thanks to the increase in electronic payments that are immediately recorded by the state, leading to tax revenues outperforming in 2023.
The January-November data by the Independent Authority for Public Revenue (AADE) showed taxpayers paying on time more than 8 out of 10 euros of the total debts in value-added tax, corporate income tax and the Single Property Tax (ENFIA). On the contrary, households seem to be struggling to pay their taxes, as shown by payments coming in late.
The AADE data show that in recent years there has been a significant increase in timely VAT payments, which has also led to the reduction of the VAT gap. In 2019 overdue payments amounted to 10.6 billion euros out of a total of €12.68 billion of VAT due (83.57%), while in January-November overdue payments came to €12.78 billion from a total of €15.09 billion in VAT due (84.7%).
According to National Economy and Finance Ministry data in the past four years, mainly thanks to the expansion of electronic transactions, the VAT gap was reduced from 23% in 2018 to 17.8% in 2021 and estimates bring it to 15% this year. The goal, as Minister Kostis Hatzidakis has emphasized, is until 2026 “to go to 9%, which is the European average.”
Therefore last year’s net tax revenue was €337 million higher than the target set in the 2024 budget just a month and a half ago, according to Monday’s 12-month budget execution figures for January-December 2023, which confirms the momentum of tax revenues displayed throughout last year.
The excess came mainly from the revenues of November, as in December the revenues were close to the targets, it is noted in the relevant announcement of the ministry. This overshoot was compensated by the increase in Public Investments Program payments by €362 million.
The primary result at the state budget level was a surplus of €3.69 billion against a target (set in the 2024 budget report) for a primary deficit of €851 million.
