Finance Minister Hatzidakis: The state cannot continue to ‘bless’ tax evasion

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The Greek economy is certain to meet a 1.1% of GDP primary surplus target by the end of the year, National Economy and Finance Minister Kostis Hatzidakis said in an exclusive interview with the Athens-Macedonian News Agency released on Sunday.

He also revealed that in the final draft of the budget, which is to be tabled on Tuesday, there are significant changes for the better as regards investments (now seen to grow by 15.1% versus the previous forecast of 12.1%) and a big increase in spending on health and education.

Asked about the changes in the taxation of freelance, self-employed workers, he said there might be some changes following a period of public consultation and that all comments will be examined and considered but that these will be minor “as the state cannot continue to ‘bless’ tax evasion.”

The minister appeared not to share the concerns of the Bank of Greece regarding an increase in non-performing loans due to inflation and high interest rates, noting that a further ECB interest rate hike did not appear imminent, while adding that the economic boost resulting from the government’s policies “is the best defence against non-performing loans”.

Regarding the execution of the budget, Hatzidakis said that this was on track despite the major natural disasters and the fact that it was an election year, as the Greek economy is “overperforming” and this leads to an overperformance of state revenues, while spending increases will be funded using revenues arising from efforts to restrict tax evasion.

The minister said that the 352 million euros in benefits that will be given to vulnerable households in December came from a surplus relative to budget targets, while total one-off spending to boost citizens’ incomes in December amounted to 717 million euros, in addition to pay rises for public-sector workers and pensioners.

Regarding the fight against tax evasion, Hatzidakis said some progress has already been made in recent years but Greece was continuing efforts in order to bring this closer to the EU average tax evasion rate, encouraging electronic transactions and restricting the use of cash. He also rejected complaints that the government measures did not tackle the “big fish” but focused on small businesses.

• “What we are trying to do is impose common-sense rules… at present, of the 500,000 freelance professionals with income only from their professions, 54% declare no income and 85% declare an annual income that is less than that of a minimum-wage worker! We say that it is not possible for a freelance worker to survive successive years of losses or on less than a minimum wage worker,” he commented.

This created a situation where employees were paying more tax than their employers, Hatzidakis pointed out, while he also highlighted provisions that allowed the self-employed to contest the presumed income under certain circumstances, such as pregnancy, natural disasters and others, as well as favourable measures for certain groups.

Source: ANA – MPA

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