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Greek polls give SYRIZA 38% and E.U. friendly ND 25%. Budget revenues slump due to government uncertainty

Zerohedge reports…

It appears taxpayers everywhere are learning from the best: their insolvent governments. In this case, Greek (non) taxpayers have decided to slow down their mandatory remittances to the government even more because the government may just not exist in two short weeks.

And since the current Greek government largely operates on behalf of unelected Brussels eurocrats, we applaud this action by the Greeks to finally take matters into their own hands. Perhaps what is more confusing is that Greeks were actually paying any taxes in the past 5 years.

eKathimerini reports…

Budget revenues have slumped over the last few days as a result of the upcoming elections and taxpayers’ uncertainty about the future. The Finance Ministry has recorded a remarkable slowdown in applications for settlement of debts to the state through the 100-installment program, as well as a reduction in revenues from the single property tax (ENFIA), while the payment of arrears to social security funds appears to have stalled.

Most taxpayers have chosen to delay their payments, given that the positions of the two main parties leading the election polls are diametrically opposite: Poll leader SYRIZA promises to cancel the ENFIA and even write off bad loans, while ruling New Democracy acknowledges the difficulties but is avoiding raising issues that would generate problems and fiscal consequences.

The dwindling state revenues will not only hamper the next government’s fiscal moves, but, given that the fiscal gap will expand, also negotiations with the country’s creditors. The Finance Ministry will have to make plans for new measures and make sure that salaries, pensions and operating expenses are covered, especially in case the creditors do not pay the bailout installments which are already overdue.

Speaking to Kathimerini, a top ministry official confirmed the major slowdown in the rate of applications for debt settlement, and referred to post-election consequences from the shortfall in state revenues. The tax collection mechanism appears to be largely out of action while expired debts are swelling due to taxpayers’ wait-and-see tactics and the reduction in inspections. The same official pointed out that it is normal for revenues to lag during election periods, adding that this time there is no scope for shortfalls.

Furthermore, it is not yet known when the 2015 ENFIA will be determined, what will happen with tax exemptions or when the new income tax declarations for the 2014 financial year will have to be submitted.

References:

http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_11/01/2015_546111

http://www.zerohedge.com/news/2015-01-12/greeks-stop-paying-taxes-ahead-elections-central-bank-scrambles-halt-bank-run-rumors

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