eKathimerini — Since 2010 Athens has introduced tax increases worth 37 billion euros in total, but the result is that state revenues have declined by 9.2 billion euros in the same period, European Commission’s official data show.
Greek governments of the last six years have voted austerity measures of 72.6 billion euros through spending cuts and new taxes in a bid to streamline the state finances. In the same period, GDP has shrunk about 26 percent.
It is clear that the tax measures are not bringing the anticipated benefits to the state budget, unlike the expenditure cuts, which bring immediate benefits for state revenues.
So far, no government has managed to put an end to the vicious cycle of recession and austerity.
Finance Ministry are hoping that 2017 will be the first year the vicious cycle will be broken: They estimate that the economy will grow by 2.7 percent and this will lead to revenues outperforming.
Still, next year is also going to witness new interventions on the side of taxes – particularly indirect ones – generating some concern over the impact they may have on private consumption.
