As a ‘signal’ in favor of tax price scale income They perceive analysts what its commander says Bank of GreeceYiannis Stournaras, in the exhibition of its monetary policy.
Specifically, the report by the BoG Governor states that ”Tax erosion is a critical issue for the justice and viability of tax policy, as it leads to an increase in tax burden without a corresponding improvement in taxpayers’ tax capacity. Therefore, the phenomenon of tax erosion has a significant impact on the fair distribution of tax burden, especially when incomes increase in nominal terms due to inflation without corresponding reinforcement of purchasing powerยป.
Further, Mr Stournaras stresses that “the tax policy implemented in Greece in 2019-23 has been able to fully offset the effects of tax erosion, reducing the actual tax burden while maintaining revenue stability and contributing to reduced income inequality. Overall, tax erosion can have a significant effect on tax revenue collection, average tax rates and income distribution, with critical consequences for inequality and optimal tax planning. Given the limited fiscal space, policy makers are called upon to achieve a proper balance between the need to reduce the taxpayers’ tax burden and the maintenance of tax revenue. The quantification of tax erosion and its integration into the training of medium -term budget strategies can improve the accuracy of revenue forecasts and the design of more targeted policy interventions. At the same time, mechanisms that affect tax erosion along the income distribution require the adoption of flexible approaches. This finding is critical for the design of whether or not the planning of taxpayers’ parameters. Recent experience in Greece shows that enhancing the progressality of tax policy can neutralize tax erosion, while contributing to a fairer distribution of tax burdens and improve taxpayment. “