Greece: the highest taxes on social security, property and consumption

Greek citizens continue to pay some of the highest social security contributions in the Organization for Economic Co-operation and Development (OECD) countries, as do consumption and property taxes, according to tax fund research.

At the same time, income from taxation of income of individuals and legal entities is significantly lower than in other OECD member countries and most European countries, despite the fact that they are the same as in other countries of the organization.

Income from individual taxpayers accounts for 15.8% of total government revenue in Greece, compared to the OECD average of 24%, Portugal 19.9%, Italy 26.9% and Spain 23 ,8%. The low level of tax receipts is believed to be the result of tax evasion, mainly among freelancers, and low collection rates, as on-time income tax payments range from 70% to 72%.

Despite a 3.9 percentage point drop in contributions over the past few years, Greece continues to receive about a third (33.2%) of its income from social security payments, compared to the OECD average of 26.4%.

Compared to other countries, Greece also has significantly higher property taxes and therefore higher fees, accounting for 7.9% of total government revenue, with an OECD average of just 5.6%. However, it is precisely in the taxation of consumption that Greece is the undisputed leader, and the tax fund’s recommendation to switch to indirect taxation, as less distorting economic activity, does not make sense for Greece. Value added tax, special consumption taxes and other charges account for 38.5% of all government revenue, 6.5 percentage points above the OECD average.

The study also notes that the OECD advocates a shift in the composition of tax revenues from income tax to consumption and property, which are the sources of most government revenue in Greece and those that put this country at the top of the list of receipts.

At the same time, a comparative analysis of the Tax Fund shows that taxation of income can cause more damage to economic activity than taxation of property and consumption.

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