2.2-bil. black hole in revenues “devours” cuts

The revenue collection seems to be decreasing since after only one month the difference with the objectives of the budget has doubled, causing a stir at the Finance ministry in view of the need for recovery measures

According to provisional data released by the ministry, the shortfall in net revenue reached 2.79 billion on July 31, compared with 1.44 billion in late June.

The inability of citizens to pay the taxes imposed by the government and the continuous extensions of the deadline for submitting tax returns resulted in the deepening of the black hole in the budget.

However, these figures do not currently contain the late tax payments to banks, after the electronic submission of tax returns that formally ended on July 31. As revealed by protothema.gr, 1 in 5 people who were first in submitting their statements left the first installment unpaid.

According to the provisional data on the implementation of the budget, the deficit during the January-July period reached 13.2 billion euros against a target of 14.83 billion, approaching 95% of the amount provided for the entire 2012.

The black hole of 2.279 billion euros in revenue is "devouring" the spending cuts by the State, which has virtually frozen all payments except salaries and pensions. The containment of costs in the seven months of 2012 that amounted to 40.847 billion euros, a fall of 4.420 billion against a target of 45.267 billion, is saving the day. However, overdue debts have exceeded 6.6 billion euros. According to the Finance ministry, the shortfall in revenue is due mainly to:

-    shortfalls in revenue collection mainly because of extensions given for the submission of tax returns
-    reduced revenues from trade taxes due to reduced domestic demand, and
-    shortfall in revenues from direct taxes from previous years and other direct taxes.

On this basis, the deficit is moderated to lower than the targeted levels by about 1.6 billion euros. In the first seven months it reached 13.203 billion euros and the primary deficit amounted to 3.070 billion (against a target of 4.536 billion).