Tax discounts come to an end

A senior Finance Ministry official on Friday signaled the end of general rent reductions and tax discounts for the timely payment of dues as economic measures are entering a new stage and pressure on the budget is increasing.

The January-April figures for the budget execution are already showing that the primary surpluses have been replaced by primary deficits, even though revenues did not collapse in April.

Therefore the 25% discount will not apply for the timely payment of taxes in May. “The discounts ended with April,” the official said, adding that the emphasis is now being placed on other instruments so as to support sectors and businesses in a targeted fashion. “We will not take anymore horizontal measures,” he stressed.

Likewise, the 40% discount on rents for businesses and employees hurt by the pandemic will end in May. “We will allow the market to adjust and tenants to discuss the size of the adjustments with their landlords, based on the real conditions of the market,” the same official said.

Nevertheless, the 25% discount went a long way toward preventing tax revenues from disintegrating in April. According to Deputy Finance Minister Thodoros Skylakakis, who on Friday presented the data on the budget in April, net tax revenues lagged their target by just 17.2% last month, which he said was “unexpectedly positive” given the conditions. Skylakakis attributed it to the 25% cut for timely payments as as well the payment culture.

He added, however, that the picture is expected to deteriorate in May, as there is a time lag in the reflection of developments in the real economy in tax revenues. “Things are not going to be as rosy,” he predicted.

Provisional budget data for January-April showed a deficit of €4.062 billion, against a target for a deficit of €1.655 billion, and against a deficit of €1.041 billion in the same period last year. Net budget revenues came to €1.4 billion, 8.7% below target.