Tsakalotos: excess surplus not just over-taxation

2 November 2017
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Finance Minister Tsakalotos vehemently denied opposition charges that Greece exceeding primary surplus targets is the result of over-taxation of the middle class. The minister was fielding questions in parliament’s finance committee ahead of the tabling of the 2018 state budget.

The coordinator of parliament’s budget office, Panagiotis Liargovas, had earlier told the committee that primary surpluses are too high. He said the middle class is shouldering the taxation burden that will allow the government to distribute its planned “social dividend” of about 1,000 euros per recipient to those in the lowest income brackets.

Tsakalotos said the budget surplus is not due to over-taxation alone, but also due to social welfare contributions of 448 million euros along with revenues from the creation of 25,000 new jobs. He added that an additional 400 million euros in revenues are expected by year’s end through a programme allowing taxpayers to reveal previously undeclared revenues.

Until now, taxpayers have declared about four billion euros in income, resulting in 400 million euros in taxes, half of which have already been collected.

Tsakalotos said the overtaxation to achieve targets is largely due to the IMF underestimating the revenue-raising capacity of measures proposed by the government. The IMF also does not factor in measures to combat tax evasion and to improve VAT tax collection.

“We have 448 million euros in excess returns from social contributions, and that is because we have more people employed. It is not due to additional taxes.

When challenged by main opposition New Democracy MPs, Tsakalotos resorted to sarcasm. “Don’t interrupt and ruin my speech because I have cornered you. You have set the bar so low that a caterpillar with tuberculosis and a meniscus problem in 25 of its 40 legs and carrying heavy grocery bags from Lidl could climb over it. Not only the government, but even a caterpillar.”

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