The end of the pandemic and the partial decline of inflation close to the acceptable levels of 2%, signal a new era for the European and by extension the Greek economy.

This year, according to the forecast contained in the draft budget, it will be recorded primary surplus corresponding to 1.1%while for 2024 the estimate is that it will reach 2.1% of GDP.

Understandably, the return to high primary surpluses means that the scope for social benefits beyond those already in place, as well as for new tax breaks, is extremely limited.

And this is because the positive return on the part of tax revenues is beginning to reach its limits. In the financial staff, they now give great weight to two main axes, through which fiscal space can be found and implemented, either the increase in social spending or the reduction of taxation.

The first has to do with its limitation tax evasion. The prime minister, as well as the financial staff, have placed the limitation of tax evasion, especially in the part concerning freelancers, high on the government’s priorities for the 4th year.

The second axis is related to development. In the draft, a GDP increase of 3% is foreseen for 2024, while this year it is estimated that this will reach 2.3%. Through this growth of the economy, which is multiple times that estimated to exist in the Eurozone, additional revenues will arise

Let’s look at the main objectives:

1. Limitation of tax evasion:

Shrinking the VAT gap to the EU average of 9%, from an estimated 15% today, will generate an additional 2 billion per year on a permanent basis.

Within the month, the new tax bill will come, which will include a series of interventions to limit tax evasion. Among others it will include:

  • Mandatory implementation of e-invoicing by 2024. In this way, controlling authorities will be able to cross-check and verify transactions in real time
  • Universal application of electronic books (myDATA). The income declared cannot be less than that resulting from the electronic information (myDATA, cash-POS), while only those that have been transmitted electronically to myDATA will be counted as expense invoices for tax purposes.
  • Extension of the mandatory possession of an electronic payment system (EFT/POS) to the remaining sectors of the retail market that currently do not have the obligation. The aim is to increase VAT revenues, limit the circulation of “black” money and expand the tax base.
  • From January 1, 2024, the payment of the price in the purchase and sale of real estate will be mandatory only by means of bank payment.
  • The digital consignment note is being activated pilotally from the beginning of 2024 and fully before the end of the same year) and thus the monitoring of the movement of goods will be done in real time.
  • The fine for using cash over 500 euros is increased, to an amount twice the amount of the transaction.
  • The payment of the majority of social and welfare benefits (child benefits, birth benefit, unemployment benefits) will be made through debit cards to exclude the channeling of benefits to the underground economy.
  • Those caught for smuggling will be barred from working with all fuel trading companies while a register of offenders is created.
  • The definition of short-term rental is amended and now short-term rental is defined as the rental or subletting for a specific period of time, less than 60 days, of a property that is posted on a digital platform and as long as no other services are provided except for accommodation and the provision of bed linen.
  • Natural persons who have on a digital platform three or more to rent/sublet for short-term rental purposes are required to start a business activity. Thus, individuals who post three or more properties for rent or sublet on a digital platform will become businesses and will be required to start by paying the corresponding insurance contributions, the trade fee and the VAT from the first property.

2. Development of the economy

In 2023 came an additional 4.6 billion euros in tax revenue. The vast majority of these came from the businesses from which the 2 billion euros came, of which almost half was from the refineries with 630 million being from additional taxation. Also 1 billion euros, above the forecast, comes from households and the income tax they have declared, because incomes have improved, either due to the increase in the minimum wage, or due to the improvement of conditions in the labor market.

From VAT, the excess return amounts to 1 billion euros, of which 500 million euros come from VAT, 300 million from tourism and only the remaining 200 from inflation.

For 2024, according to the draft, the net revenue of the state budget, on a fiscal basis, after the deduction of tax refunds, is predicted to be 68.140 billion euros, increased by 2.955 billion euros or 4.5% compared to 2023.

Particularly:

1. Taxes: Tax revenues are expected to reach EUR 62,901 million, up by EUR 1.576 billion or 2.6% over 2023, mainly due to the projected expansion of the economy as reflected in the macroeconomic projections. More specifically:

  • Taxes on goods and services: Revenues from taxes on goods and services are forecast to reach €35.108 billion, up €1,401 million or 4.2% on 2023.

Particularly:

-VAT revenues are expected to reach 24.271 billion euros, increased by 1.147 million euros compared to 2023 and

– consumption taxes are forecast at 7.136 billion euros and are increased by 28 million euros compared to 2023.

-Revenues from regular real estate taxes are expected to amount to 2.487 billion euros, reduced by 53 million euros compared to 2023, mainly due to the 10% reduction in ENFIA for owners who will insure their homes for natural disasters.

Income tax: Income tax revenues are expected to reach €21.558 billion, up €597 million or 2.8% from 2023.