Indirect taxes are galloping in Greece, with the “race” being driven by VAT collections due to high prices, followed by Special Consumption Taxes (excise duties). According to the new OECD report, our country ranks in the top five member states with the highest indirect taxation rates, as in 2023 corresponding revenues reached 40.1% of the total, significantly higher than the Organization’s average (31.2%).
High VAT and excise tax rates boost public revenues, but simultaneously maintain high prices and disproportionately burden household budgets, hitting economically weaker segments the hardest.
In 2024, total tax revenues reached 39.8% of GDP, up from 38.9% in 2023, remaining higher than the OECD average (34.1%). Greece now ranks 10th in terms of tax revenue height relative to GDP, while social insurance contributions also move at high levels compared to other Organization countries, resulting in significant labor cost burdens.
OECD data on taxes in Greece and comparison with other countries
According to OECD data for our country:
1. Greece has very high dependence on VAT and special taxes. It derives approximately 40.7% of its total tax revenues from consumption taxes:
– 22.5% from VAT
– 18.2% from special consumption taxes (fuel, tobacco, etc.)
The OECD countries’ average is 31.3%, with Greece ranking 5th globally in terms of dependence on indirect taxation.
2. Social insurance contributions are among the highest in Europe. Social security contributions in Greece correspond to 28.8% of total tax revenues, when the OECD average is 25.5%.
3. Income tax is lower than average, corresponding to 15.5% of total revenues, showing that Greece doesn’t rely as much on direct income tax as other developed countries. The OECD average is 23.7%. Indicatively, in Denmark the percentage reaches 57.2% and in Sweden 26.9%.
4. Greece, relative to its economy’s size, presents total tax revenues above 38% of GDP and exceeds countries like Germany (38%), Spain (36.7%) and the United Kingdom (34.4%).
5. There’s great dependence of revenues on wage earners and pensioners. The OECD notes that income tax revenues in Greece come mainly from employees and pensioners, while revenues from freelancers and self-employed are proportionally lower compared to other countries.
6. Greece chronically records among the largest increases in tax revenues. Between 2010 and 2024, the tax-to-GDP ratio increased by 7.4 percentage points, ranking the country 3rd among OECD member states, after Slovakia and Japan.
