Ministry of Finance: Promises without consideration 40 billion per four year by Mr. Kasselakis

Promises without consideration 40 billion in four years by Mr. Stefanos Kasselakis’ president, Mr. Charis Theocharis and Thanos Petralias, to Mr. Stefanos Kasselakis, in joint announcement More specifically, the announcement of Mr Theocharis and Petralia on the part of HYNIK states that “Mr. Kasselakis may have been weaned by Mr. Tsipras at the recent conference of SYRIZA, but he was not weaned by his methods and tools. Measures with enormous budgetary costs, without basic costing, without planning, without even checking whether they are in line with European legislation. In particular, it follows: EUR 16 billion additional budget costs for the main measures in the first year of implementation, EUR 8 billion annual costs for the following years, EUR 40 billion total additional budget costs in the four years of implementation, without any realistic revenue, ignoring the country’s budgetary balance. Promises without a face is shared by Mr. Kasselakis. Just like Mr. Tsipras did a few months ago. On the contrary, our Government continues to apply its programme in full. Over 50% of our programme has already been voted and implemented, and this is in full harmony with the Stability Programme. The Government’s programme reduces or abolishes taxes, increases citizens’ income and does not jeopardise the country’s fiscal stability. In order to help Mr Kasselakis and his advisers, we therefore present all the measures he has announced along with their financial impact: In order to help them further, detailed commentary on the measures follows, the main cost factors for these and the problems they may create. It is noted that the costing was done by us and our staff on the basis of the objectives of the budget and the distribution of tax data. Let’s see what Syriza suggests: Direct State measures to suppress accuracy: « 1. To establish a maximum profit margin of 5% on the wholesale electricity market and to establish a maximum profit in retail per MWh on an annual basis . “ The European framework provisionally established for the Ukrainian and therefore energy crisis has allowed our country and, following approval by the Commission on the basis of a temporary and exceptional nature of the measure, the operation of the automatic withholding mechanism for energy companies until December 2023, and then electricity prices have returned to much lower levels by approaching prices before the crisis. Any permanentisation of a profit retention mechanism or maximum profit margin is highly doubtful if it complies with European rules, and is no longer expected to have a substantial effect on prices, given the levels that have been set. On the contrary it is highly likely to lead to from-investment in the energy sector and a reduction in competition at the expense of the consumer. « 2. A ceiling on the profit margin from refining and marketing on a permanent basis on the average of all Member States of the European Union. Temporarily for no less than 1 year, we are reducing excise duty on fuels to the lowest permissible rate in the European Union. In particular, for agricultural oil, we are moving towards a full refund of excise duty and the introduction of an excessive VAT rate at 6%, from 24% currently in force.” The reduction in the excise duty on fuels at the lowest rate allowed in the European Union entails a financial cost for a year of EUR 1.9 billion . It is noted that according to Budget 2024 the revenues from fuel IPCs amount to EUR 3.8 billion and EUR 4.7 billion if VAT is taken into account. As far as agricultural oil is concerned, as we have already announced, the EPC will be returned from 2025 on the basis of actual consumption. However, fuel under the European Directive is not in the goods permitted to be converted to a lower VAT rate. The reduction in VAT to 6% proposed is therefore inapplicable. For the ceiling on the profit margin from refining and marketing on a permanent basis it is highly doubtful whether it complies with European rules. “ 3. For food and industrial goods of wide use, we go on to impose profits across the supply chain and establish daily intensive controls. We impose a maximum profit margin on importers-domestic industrial producers and retailers stores. Temporary for 6+6 months, we proceed to zero the VAT rate in the categories of basic goods, as specified by ELSTAT, namely flour, bread, cereals, meat, dairy products, eggs, oils, vegetables and of course in all food products for infants and infants. In the permanent measures we propose the inclusion of individual adult hygiene and baby care products in the over-reduced VAT rate 6% of 13% currently in infant formulae and 24% currently in adult and elderly species.” The zeroing of VAT on foodstuffs is estimated to bring a revenue reduction of EUR 2.3 billion at year level. Personal hygiene and protection (soap and other preparations for personal hygiene, antiseptic solutions, antiseptic wipes and other antiseptic preparations, protection masks and medical gloves) are already at the 6% rate, based on the recent tax bill. It is unclear what other products the proposal refers to. For profit ceilings throughout the supply chain, importers-domestic industrialists, producers and retail warehouses are highly doubtful whether they comply with European rules, while creating risk from-investment in the Greek market and shortages of basic goods. “We propose a reduction in the VAT rate on the European Union average, i.e. at 21%, 11% and 5% respectively in the other categories of goods, as well as 6% for water supply from 13% and in the sewerage to 23% of 24% of what it is today.” The reduction in rates to 21%, 11% and 5% is estimated to have a budgetary cost of around EUR 2.4 billion per year . It is noted that VAT revenue according to Budget 2024 (with rates of 24%, 13% and 6% currently in force) amounts to EUR 24.4 billion annually. In addition, no other goods (e.g. water supply-discharging) can have different rates (6% or 23%), as only three factors (normal, reduced and over-reduced) are allowed in the EU. “ 4. We proceed to the immediate establishment of a EUROPEAN CONSUMER PRICES Observatory and will publish each week comparative tables of product prices in Greece and 10 more European countries and for the 66 categories of basic goods that the current government regulated in 2023 as related to decent human life. 5. We propose the immediate reduction of the cost of the card of unlimited routes from 27 euros to 9 euros, for all modes of transport, namely metro, electricity, tram, trolleys and buses. 6. To reduce agricultural and livestock costs we are committed to the establishment of transnational contracts for the supply of critical supplies and feed and the establishment of a maximum allowable selling price by multinational and domestic producers and suppliers. We are committed to the priority inclusion of farmers and cooperatives in the programmes of grants for energy and energy projects. We are committed to the immediate establishment of a mechanism for recording and controlling agricultural stocks and establishing a cost factor throughout the supply chain. And finally, we are committed to subsidising feed and fertilizer in the event of increases from unstable external factors. 7. With regard to strengthening and improving the performance of the control and fines mechanism for speculators, we change the current ineffective framework of the imposition of IDC fines and link the amount of fines with the turnover of the sanctioned operation. “ A maximum selling price to supplies and feed and to multinational operators obviously leads to shortages in these supplies from the domestic market, as they are not required to sell their products to Greece. Reducing the cost of the unlimited routes card by 66% creates a significant loss of revenue in STAY and OSH, with what this entails for their operation. It is noted that the revenue from the provision of services to the two bodies according to their budget amounts to around EUR 230 million. The commitment to subsidise feed and fertilisers should increases arise from unstable external factors, is vague, uncoordinated, without a source of funding and does not take into account State aid rules. For the tax system SYRIZA suggests: “1 reform: Amendment of the scale of taxation of income of natural persons (employees and self-employed persons) For natural persons and freelance professionals – For income up to 10,000 euros tax-free for all. – For income from 10,000 – 15,000 euros from 22% currently in force, 10% is proposed. -For income from 15,000 – 20,000 is proposed 12%. -For income from 20,000 – 26,000 euros at 15%. -For income from 26,000 – 30,000 euros from 28% to 18%. -For income from 30,000 – 40,000 euros from 36% to 22%. – For income from 40,000 – 60,000 euros from 44% to 30%. – For income from 60,000 to 80,000 € from 44 to 36%. – For income from 80,000 to 100,000 € from 44 to 38%. – For income from 100,000 to 200,000 € from 44 to 38%. * For income over €200,000 we increase tax rates, which reach up to 49% for those who have income over €900,000 a year.” The cost is estimated at around EUR 3.5 billion per year . It is noted that the income tax ratio (after refunds) for the tax year of 2022 employees and pensioners amounted to EUR 6.5 billion of which 6.3 billion relates to income up to EUR 200,000 and 4.7 billion to EUR 40,000. In addition, the corporate tax ratio was 1.1 billion euros, of which 1 billion euros are income up to 200,000 euros and 600 million euros to 40,000 euros. Therefore the quantification of the SYRIZA PS for costs of only 124 million is out of the question. Also, is it not clear what about tax-free for families with children? They also do not specify whether the definition of duty-free means that there is no more step-by-step tax reduction for amounts above EUR 10,000 as currently in force? Establish a progressive scale of taxation for enterprises with two simple rates: – 17% instead of 22% currently valid for profits up to 220,000 euros and – 24% instead of 22% currently applicable to companies that earn more than 220,000 euros.” The proposed measure is an incentive to declare real profits, as well as an incentive to increase business size. It is understandable that many companies will either declare less profits than EUR 220,000, or will invoice through other companies that have the lowest rate (17%). Therefore, the measure in theory could have a very small positive financial impact, but taking into account the change in the behaviour of undertakings should ultimately have a negative financial impact. ‘3 the reform: Reduction in employer and employee contributions by 4.5% over the first three years in order to achieve a 5% reduction in unemployment in conjunction with other measures.’ The cost after the completion of the 4.5-unit reduction is estimated at around EUR 1.9 billion per year . The cost of reducing each unit is estimated at around EUR 430 million . It is not clear whether this reduction is proposed to come from the health or pension side and therefore leads to a reduction in pension benefits. ‘4 the reform: Complete abolition of the unfair and anti-development measure of the tax advance. For everyone! Free professionals and businesses. “ The cost is estimated at EUR 4.2 billion for the first year of implementation. It is noted that the income tax revenues of legal persons, including the tax advance, according to Budget 2024, are estimated at 6.7 billion euros. ‘5 the reform: Reduction in rent tax up to 12,000 euros to 5% of the present 15%. “ The cost is estimated at EUR 650 million per year. The total rate of rent is EUR 1.5 billion per year. Additional communications on finding resources ‘Inclusion of dividends of natural persons on the tax scale. “ With regard to the increase in dividends tax on the basis of the scale of taxation of natural persons, it is noted that dividends have considerable flexibility depending on their tax rate, as it is in the company’s choice to distribute or not to dividend and to what extent. In 2019 at a rate of 10%, 1.4 billion euros dividends were declared (corresponding to previous years 2017-2018 the dividends were around 1.3 billion euros), with a tax of 142 million euros. After the 5% reduction we had declared dividends of EUR 5.3 billion in 2020, EUR 4.2 billion in 2021 and EUR 4.7 billion in the tax year of 2022 with a tax of EUR 233 million. It is obvious that in the event of an increase, businesses will again prefer non-distribution of dividends, as they used to do. Therefore, there is no positive financial benefit and indeed EUR 1.8 billion calculated by the SYRIZA PS. “The projected sources of compensatory revenue I mentioned before are detailed, I will not bother you too much with them. But what you need to remember is that the cost of combating accuracy is EUR 3,243 billion and the revenue from the extraordinary taxation of profit is EUR 3,62 billion. More specifically and according to moderate calculations, a sum of EUR 900 million is from an extraordinary 90% contribution to the excess profits of energy companies from September 22 to December 23. A sum of EUR 715 million is from an extraordinary contribution to 90% of the profits of the refining and trade companies for the year 2023. The Greek consumer has paid for them. A sum of EUR 1.6 billion is from an exceptional contribution to bank gains with the huge transaction costs, at a rate of 90% for 2023, which, by the way, concerns the difference in interest rates compared to the average interest rates on the Eurozone banks. “ The cost of the measures therefore amounts to EUR 16 billion in the first year of implementation and EUR 40 billion in four years. These, according to Syriza PS, will be covered by €3.6 billion revenue recovery measures, which are one-off and in fact most of the financial measures proposed are permanent. But even these superprofit recovery measures are in Syriza PS’s imagination. It calculates 900 million from superprofit energy companies for the period September 2022 – December 2023. Over-profits already withheld through the mechanism for withholding surplus profits approved by the European Commission and related to the same period. For refining companies, €715 million is estimated in 2023. At a time when the European framework allows tax only on the part of profits exceeding 20% of the average earnings of previous years and EUR 1.2 billion of tax and exceptional contribution have already been collected in the previous year when profits were increased. With regard to the taxation of banks with an exceptional contribution of EUR 1.6 billion, we refer Mr Kasselakis to Italy’s example, which, following the announcement of an exceptional contribution to the banking system, lost credibility in the financial markets and had to take back the measures announced. Unfortunately, Syriza PS does not know, does not cost, quoting unrealistic proposals, in many cases impractical and contrary to European law, ignoring the country’s budgetary balance.