Final draft budget: The growth will bring increased revenues of 3,5 billion in 2022 and without any new taxes

The growth of the economy will be the one that will bring increased tax revenues for 2022, according to the final draft budget, since no new taxes are included.

On the contrary, the reduction of the tax rate from 24% to 22% for companies will be seen in the budget.

The statement of the Minister of Finance, Christos Staikouras, that “in 2022 there is no new tax” is typical.

Total tax revenues for 2022 are estimated to rise from 46,56 billion to 50,055 billion euros and are increased compared to the draft by 536 million euros. This is solely due to the higher expected growth.

Between 2021 and 2022 there is a positive difference in tax revenues of 3,5 billion euros. If one looks at the structure of taxation and the difference between the two years, the increase is solely due to growth.

More specifically, taxes related to consumption are higher by almost 2,2 billion euros, while taxes on income are increased by 1,3 billion and are roughly evenly distributed between individuals and businesses. More specifically, it is estimated that an additional 653 million will come from individuals and 614 million from businesses.

Also, the increase in employment is expected to bring more income of 520 million for the Social Security Organizations (OKA) from insurance contributions.

In terms of net state budget revenues, on a budgetary basis, after deducting tax refunds, they are projected at € 55.425 million, up € 602 million or 1,1%, from the MTEF 2022 target -2025, mainly due to the updating of the macroeconomic framework for economic growth.

The structure of taxes in 2022

Based on the forecasts of the state budget 2022, the receipts of the State during the next year are expected to move as follows:

• Income tax: Revenue from income tax is expected to amount to 15,348 billion euros, increased by 799 million euros or 5,5% against the target. Particularly:

1. the personal income tax is projected at € 10,352 billion, up € 196 million from the target; and

2. The corporate income tax is projected to increase by € 582 million against the MTEF 2022-2025 target and to reach € 3,794 billion, due to the updating of the macroeconomic growth framework of the economy related to corporate profits after pandemic.

• Taxes on goods and services: Revenues from taxes on goods and services are projected to amount to 28,491 billion euros, increased by 176 million euros or 0,6%, compared to the target of MTEF 2022-2025. Particularly:

1. VAT revenue is expected to reach EUR 18,755 million, down by EUR 42 million from the target,

2. Excise duties are projected at EUR 7,067 million and are increased by EUR 58 million against the target.

• Taxes and duties on imports: Revenues and duties on imports are projected to be € 297 million, marginally higher than the target.

• Regular real estate taxes. Regular real estate tax revenue is expected to reach € 2,503 billion, down € 75 million from the target.

• Other production taxes: From the other production taxes, revenues of 1,034 billion euros are projected, reduced by 43 million euros compared to the target of the MTEF 2022-2025.

• Capital taxes: Capital taxes are projected to amount to 170 million euros, reduced by 50 million euros compared to the target of MPDS 2022-2025, mainly due to the abolition of the tax on parental benefits – donations up to 800.000 euros, for first degree relatives.

• Other current taxes. Revenues from other current taxes are projected at € 2.213 million, down € 190 million from the MTEF 2022-2025 target, mainly due to reduced non-classified tax revenues and their correct classification, depending on the their nature, in the revenue categories.

• Reimbursements of undue revenue are projected at € 4,957 billion, up € 86 million from the target.