Greek Primary Surplus Target at Risk

A drop in tax collection and political uncertainty has made the target of 8.43 billion euros in state revenue very hard to attain, therefore putting the primary surplus target at risk.

The target for the 2014 primary surplus was to have revenue exceeding expenditures by 3.5 billion euros or 2% of gross domestic product (GDP).

Alternate Greek Finance Minister Christos Staikouras appeared optimistic on Friday saying that the primary surplus will make the target of 1.5% of GDP and even reach 1.8% by the end of December.

The Finance Ministry has to collect 5.8 billion euros from income tax in December. However, many taxpayers have stopped paying and try to make new arrangements in more installments. Others have stopped paying altogether, waiting for major political changes. Currently, there is a 1.2-billion-euro drop in tax revenue.

The Greek state expects to collect 600 million euros from the unified property tax (ENFIA) but many taxpayers have failed to pay that because there is still a dispute over the installments while many taxpayers still dispute the legitimacy of the particular tax.

The Finance Ministry also expects 2 billion euros from the Eurosystem, from the sale of Greek bonds. But in order for Greece to receive the funds, there must be an agreement with the Troika of international creditors first. If the agreement is not reached by the end of February 2015, the 2 billion euros will count toward next year’s revenue.