The second half is crucial for the economy

By Tasos Dasopoulos

The course of the budget from June will judge the resilience of the economy for further support of businesses and households towards accuracy and at the same time the achievement of the fiscal targets of 2022.

Despite the good implementation of the budget so far, with tax revenues recorded by an increase of about 1 billion euros compared to the targets of the 2022 budget, the real resilience of citizens to accuracy, will be measured by the end of the month and then, when direct income taxes for 2021 will begin to be paid.

In the first four months of the year, continuous increases in fuel, food and raw materials increased VAT revenues by about € 400 million, due to the fact that the basic indirect tax is imposed on products and services whose prices are constantly rising from the end. of 2021.

The real crash test for the income, as in every year, will evolve from the fulfillment of the confirmed debts in income tax and ENFIA. Indirect taxes are related to consumption and the level of prices. Direct taxes, however, are related to the real taxable capacity of taxpayers and consequently to the disposable income.

Based on the budget, the Ministry of Finance expects from now until the end of the year, 12.45 billion euros from the income tax of natural and legal persons and 2.3 billion euros from the basic real estate tax, ENFIA, the first installment of which must be paid by the end of May.

The government has already taken a number of measures to boost disposable income. Recently, we had the announcement of the significant intervention of 3.2 billion euros to contain from June up to 85% of the increases in electricity tariffs, from 2021. Since the beginning of the year the government has implemented measures totaling € 3.4 billion in grants and direct payments. The same package of measures includes the reduction of ENFIA for this year by 380 million euros and the second increase of the minimum wage by 7.5% and a total of 9.7%, since the beginning of the year.

The concerns of YPOIK

The concern about the course of the revenues from YPOIK, is due to the fact that the aids and the aids that have already been given or will be given in the next period, can not cover 100% of the loss of income in fuel and food.

Therefore, depending on his financial situation, each household and each business will decide whether to pay its tax obligations on time, whether to settle its debts with the new fixed arrangement up to 48 installments or to leave its obligations unpaid.

A second cause for concern is the forthcoming rise in ECB interest rates over the summer. The move will change the landscape in corporate loans for working capital, but also for mortgages. The pressure from higher installments of loans and credit cards will be another deterrent for someone to pay their tax obligations on time.

The goals

The financial staff is waiting for a satisfactory execution of the budget so that they can, in the summer, plan additional support measures aimed at the financially vulnerable from the autumn.

Also, everyone agrees that despite the very bad international situation, the primary deficit should not exceed 2% of GDP set as a target for this year, the fiscal deficit should not exceed the target of 4.4% of GDP and the debt will should fall to 180.2%. All this, to enter “with the right” in 2023, a year in which we are expected to return to primary surpluses.