The measures to limit tax evasion fill the state coffers and create new data for the fiscal policy and the goals set for the primary surpluses and debt in the coming years. Already, according to the execution data of this year’s budget, in the eight months the excess of revenues amounted to 1.9 billion euros, while according to the latest estimates of the financial staff, in the coming years the surplus of revenues is expected to rise to 2-2 .5 billion euros on an annual basis.
The new fiscal landscape will be reflected in the 2025 budget projections to be tabled in Parliament in early October as well as in the 2024-2027 medium-term program being discussed with Brussels and expected to be finalized within the next month.
The stamp of these positive developments was given by the Minister of Finance Kostis Hatzidakis with his statements to Bloomberg last week, where he announced that this year’s primary surplus will be higher, at 2.4% of GDP, against the initial forecast of 2.1% of GDP.
The goals for the economy
According to information, the goals of the Ministry of Finance for the primary surplus are expected to move to similar levels in the coming years, raising the bar compared to the forecasts of the medium-term program so far (2.1% of GDP).
These developments, combined with the fact that Greece is growing at a much higher rate than the other EU countries, give the financial staff more flexibility in terms of spending policy without jeopardizing the policy of fiscal discipline and favor the effort to reduce the debt . It is indicative that due to the excess of revenues, this year’s prime ministerial announcements at the TIF included an additional package of relief and aid of 500 million euros in full agreement with the European Union.
“Due to the better-than-expected performance of the budget, we can have a larger increase in spending compared to initial estimates,” Mr. Hatzidakis said in his interview with Bloomberg.
Greece will be able to increase its net spending by “slightly higher than 3%” in 2025 — against the initial forecast of 3% — and continue to increase it at a similar rate until the end of 2028, the minister clarified.
As far as the public debt is concerned, the Ministry of Finance now foresees its reduction by 20 points by the end of 2028. From the levels of 152.7% of the GDP expected to be formed this year, it is estimated that it will be limited to 130% of the GDP, which significantly increases the chances that Greece will drop from the top rung of the EU countries with the highest debt as a percentage of GDP.
Early repayment
In this context, the government is planning a new early repayment of loans from the rescue program with a total value of 8 billion euros ($8.9 billion). This will be the third early repayment of the loan that Greece received in the first rescue program in 2010, known as the Greek Loan Facility.
On the tax evasion front, two important interventions that have given a big boost to state revenues are on the one hand the new way of presumptively determining the income of freelancers, on the other hand the network of measures implemented for digitization and the use of new technologies by AADE for the capture of taxable material. Among these measures are the connection of cash registers with POS, the expansion of electronic transactions, such as the utilization of tax data from the My DATA platform that allow the automation of tax audits.
Source: APE-MEP
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