By Chrysostomos Tsoufis

The “surplus income” from VAT are at the center of the pre-election dispute between the ND and SYRIZA. Until June 25, the official opposition party has made its flag the argument that the economic plan of the New Democracy government over the last 2 years was to keep the high rates of indirect taxes constant in order to fill the public coffers and then to gives allowances.

Allowances that according to Alexis Tsipras ostensibly directed at citizens. In reality they are directed into the pockets of the cartels – as he complains – of the energy, refining and supply chain. In short, the SW he is accused of using the weapon of precision to carry out a massive redistribution of income from the weakest and middle classes to the few and powerful.

Of course New Democracy disagrees. The only thing the two factions agree on is that there was an over-collection of VAT revenue. 2022 revenues exceeded initial estimates by €4.2bn, but Piraeus argues that not all of this is due to accuracy:

-€1.4 billion come from the greatly increased tourist traffic. In 2021, receipts from tourism for the semi-closed Greek economy were around €10.5 billion. Last year, and after the return to normality, receipts shot up to €17.7 billion. Applying an average rate of 17% to the difference of the 2 sizes gives us €1.4bn

-€1.6 billion from increased private consumption. Released from quarantines and with “inflated” deposits from the aid given but also from not being able to spend in 2021, Greek households consumed in 2022 AT CONSTANT prices €9.7 billion more than they did in 2021. And here the calculation is made with an average VAT of 17%.

-€200-300m from the increase in electronic transactions. According to Bank of Greece their value in 2022 rose to €94 billion from €84 billion. in 2021, one could well argue that €200m is a conservative estimate.

The remaining €1.1-1.2 billion, the previous leadership of the Ministry of Finance admits that they come from accuracy. However, it goes without saying that if he is right, it is not an amount with which any government can make a serious social policy, much less a redistribution of wealth.

In any case, in the last 18 months, according to the assessment of its work, the government took measures to support households and businesses amounting to €13 billion just to deal with the energy crisis with subsidizing electricity bills, market pass, fuel pass, diesel traffic subsidy and an increase in allowance heating among others.

And the €4 billion of VAT surpluses is only a fraction of that.