There is another more… extended household expenditure report from Eurostat, which increases the annual costs to 129 billion euros. All three figures – €79 billion AADE, €69 billion ELSTAT and €129 billion Eurostat – refer to the same year: 2021.

There are clear signs that we are spending more than we advertise. The request of the OECD is also understandable, which, in another report on Greece, calls for measures to “expand the tax base”.

Landscape in the mist…

Greece is in the unfortunate position of being unable to determine with relative certainty either household income or expenditure. All statistics leave unanswered questions and suspicions. In tax returns, we declare income of 79 billion euros (by the way, this is the number in tax returns for 2021 and in tax returns for 2022), but we are taxed at 87 billion euros, because the tax office does not consider, that 4 out of 10 have an annual income of up to 5,000 euros, so the presumption of a living wage applies. In the Family Budget Survey, produced annually by ELSTAT, 6,000 selected households are asked to “report” the expenses they incurred in the past 15 days. From their answers, which are clearly biased because they are a sample survey that does not distinguish between spending with or without a receipt, it follows that household spending on consumption in 2021 amounted to 69 billion euros. . But this amount includes 12 main “groups” of expenses. The Eurostat survey, which includes additional spending categories, again raises the corresponding amount to 130 billion euros for 2021.

More than 250,000 self-employed out of a total of 650,000 declare losses on a permanent basis…

Expansion of taxation

Whatever the actual amounts of spending on the one hand and income on the other, the issue that the OECD brought back to the table in its report last week – broadening the tax base – is back on the table. The expansion of the tax base means the requirement to pay taxes to citizens who are currently not burdened at all. And there are many of them: more than 250,000 self-employed (out of 650,000) constantly report losses. There are at least 650,000 taxpayers who show zero income, while the tax-free ones provided by the scale (about 9,000) exclude more than 15 billion euros from income tax when the total income of working and retirees exceeds 60 billion euros.

The first expansion of the tax base will occur this year and will be the result of an adjustment to the tax scale without indexation. Hundreds of thousands of private sector workers, as well as low-income retirees who are currently covered by the tax-exempt benefit and therefore do not pay income tax, will soon learn from their monthly pay slips that tax withholding will begin. The amounts can be limited to a few euros per month (i.e. 3-5 euros), however this will be the first time they will be asked to pay money (by deduction) to the tax office. Why did this happen?

1. A minimum wage worker today receives 713 euros gross. Withholding tax is zero. As soon as the minimum wage is increased (from April 1), deductions will begin. In the worst-case scenario of 6% (which raises the floor to €756) the hold will be €3.09, and in the most optimistic scenario of 9.5%, which raises the gross margin to €781), the hold rises even further to €5. per month.

2. Something similar will be done with a low-income pensioner whose nominal income will increase by 7.75%. If he is currently covered by a non-taxable benefit (because, for example, his taxable pension does not exceed 780 euros), then with the increase, he will find that tax withholding will begin.

This expansion of the tax base will occur through the so-called “non-indexation scale adjustment”. It is expected that after the elections there will be a broader discussion of further steps in this direction with the aim of restoring the serious imbalance in the Greek tax system: the dependence of state revenues to a very large extent on indirect taxes and social security contributions and much less on income tax, thus undermining the concept of progressive taxation.