These days are the days of the Budget… But out of habit, especially after the memorable years, when the draft Budget came “pre-filled” from Brussels anyway, no one pays attention to what is written.
The reasons are two. One is, as we said, the … habit. The second is because now, as in the past, so much happens in between in time, that in the end we are lucky if a corrective plan does not have to be filed just before the summer because of the big deviations.
But there is something worth pointing out just before the draft Budget of 2025 gets the – almost automated and indifferent – vote of the members of the Greek Parliament.
This is about revenue and basically tax revenue. And even more specifically the revenues from Excise Taxes and VAT, the admittedly most unfair (and non-progressive) taxes we pay.
The Budget Law in Greece provides that in addition to income subject to direct taxation, indirect taxation is also provided for, which is mainly known as VAT, but also VAT or “fees” etc.
What is not widely “known” to taxpayers is that in Greece, we do not only pay income tax and consumption tax (VAT).
We have the privilege of paying tax on top of the tax we have already paid on consumer spending.
In other words we pay VAT on the Excise Duty they have already paid.
Where; The “law” provides for a second round of taxation with the imposition of VAT on the already existing indirect taxes. Which means that for every liter of gasoline or other fuel, or alcohol or other tax on cigarettes, electronic and non-electronic, coffee, etc. first we pay the VAT and then we pay VAT not only on the value of the product we bought but in total on the value plus the tax (VAT) we already paid (!).
And it is good to say, how much alcohol or coffee will you consume and you will pay double tax, but with electricity, with oil and gasoline, natural gas why do you have to pay “tax on top of tax”?
It is worth looking here at what the 2025 Budget provides for this crazy double taxation to understand why the Ministry of Finance agrees to discuss everything, even the high fees of the banks, but not the indirect taxes that it collects twice every time we put the hand in pocket.
From the imposition of VAT on Excise Taxes, the Budget foresees revenues of 1.66 billion.
That is, 1.66 billion euros in revenue from the taxation of the tax that has been collected in the form of the Social Security Tax (!). In other words, if you want the simple explanation of why the Ministry of Finance does not accept talk about even a minimum reduction of the EFFK or the VAT, the facts are here: because it simply collects not double, but multiple tax since for each unit of the EFK that has collected additionally collects the prescribed VAT.
It looks like a violation of every rule of logic about what taxation means and much more like an injustice of an unprecedented scale, since of course the “burden” of the cost of a liter of gasoline/oil/natural gas, or electricity with double-taxed consumption for an income is another low-pensioner or minimum wage worker and other of the highest disposable incomes.
The details and breakdowns of how much VAT we pay on top of VAT on every item we buy are ‘printed’ in the 2025 Budget which has already been tabled in Parliament.
What is not in the Budget is how these double tax payments will be able to be ‘serviced’ by the already depreciated disposable income in 2025…