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Greece lost 4.9 billion euros in uncollected tax revenues

Staff Writer |
Greece’s lost value-added tax remittances in 2014 were 4.9 billion euros, while the VAT tax losses between 2010 and 2014 amounted to some 32.2 billion euros, according to a European Commission study.

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However, Greece managed to reduce the 2014 VAT losses compared to the previous year by some 1.4 billion euros.

“In 2014, Greece marked a considerable reduction in its relatively high VAT Gap. The increase in VAT compliance was accompanied by a significant decrease of the VAT base and effective rate, which led to an over 7 percent decrease in the VAT Total Tax Liability (VTTL),” the report said.

Still, Greece recorded the fifth worst performance in VAT losses among the EU’s 28 member-states with the VAT Gap rate ranging from a high of 37.9% of uncollected VAT in Romania to a low of only 1.2% in Sweden.

In absolute terms, the highest VAT Gap of 36.9 billion euros was recorded in Italy while Luxembourg had the lowest of 147 million euros, the report said.

“Today's report is evidence that while some Member States have improved their VAT revenue collection, substantial progress can only be achieved if Member States agree to make the current EU VAT system simpler, more fraud-proof and business-friendly,” the report said.

Greece’s budget ordinary revenues declined by 0.7% y-o-y in August, falling short of the government’s target by 1.7% or 65 million euros, according to press reports.

Reports, citing sources in the Finance Ministry, said that revenues reached 3.8 billion euros, lower than the monthly target of 4.18 billion euros, largely due to the the delay in the payment of the first instalment of the property tax-ENFIA.

The collection of ENFIA was initially scheduled to start being collected in August, but it has been pushed back by one month to September.

Recall that first half ordinary budget revenues were running ahead of targets by a solid 780 million euros. However, weak July performance ate up the cushion and the beat for the first seven months is currently 400 million euros.

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