"Well well!": declared 79 billion euros to the tax office, but spent 129 billion

According to the Independent Tax Service, the total declared income of all taxpayers is at the level of 79 billion euros. Nevertheless, when checking and comparing the data, it turned out that 79 billion euros were declared, and 129 billion were spent!

The issue of expanding the tax base brings the OECD (ΟΟΣΑ) back to the discussion of the report published last week. The expansion of the tax base means the requirement to oblige citizens to pay taxes (persons who at present were not taxed at all).

According to the Independent State Revenue Office (Ανεξάρτητης Αρχής Δημοσίων Εσόδων), the total declared income of all taxpayers is at the level of 79 billion euros.

According to an analysis of the data provided by the Hellenic Statistical Office regarding the family budget of taxpayers (sample of approximately 6,000 households), the annual expenditures of only 12 main categories of households amount to 70 billion euros. That is, almost all reported income is spent on food, alcoholic beverages, clothing, housing, durable goods, health care, transportation, communications, recreation, education, restaurants, and “other” goods.

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

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

All in the fog…

Greece is in the unfortunate position of being unable to determine with relative accuracy either household income or expenditure. All statistics leave unanswered questions and cast suspicion. On our tax returns we claim 79 billion euros in income (by the way, this is the number in both 2021 and 2022 tax returns), but we are taxed on 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 ELSTAT’s analysis of family budget data annually, 6,000 sample households are asked to “report” the expenses they have made in the last 15 days. From their responses, which clearly have an error (since this is a random check that does not distinguish whether spending was made with or without a check), it follows that household spending in 2021 amounted to 69 billion euros. However, 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 people out of a total of 650,000 declare losses on a permanent basis.

Expansion of taxation

Whatever actual amounts of expenses on the one hand and income on the other, an issue that the OECD has raised again for discussion, i.e. expansion of the tax base, again becomes relevant. This means the requirement to impose taxes on citizens who at present were not required to pay them at all, writes “Kathimerini”.

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 retired people exceeds 60 billion euros.

First the expansion of the tax base will occur this year and will be the result of adjusting the tax scale without indexation. Hundreds of thousands of private sector workers, as well as low-income pensioners, who are currently “beneficiaries” and, as a result, do not pay income tax, will soon find out 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.

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