Greece's tax revenues slumped 23% below target in January

Greece Yannis Behrakis/ReutersA woman holds a Greek flag as she takes part in an anti-austerity pro-government demonstration in front of the parliament in Athens February 11, 2015.

Greece’s tax revenues slumped 23 per cent below target in January as citizens held off on paying taxes before a snap election, marking a setback for the new left-wing government as it seeks a deal with European partners to avert a financial crisis.

Finance ministry data showed tax revenues were 3.49 billion euros in January, about 1 billion euros below the target of 4.54 billion set under Greece’s latest budget.

The grim data adds to concern about Greece’s finances as time runs out for the government, which won the Jan. 25 election, to bridge wide differences with European partners before its bailout deal expires at the end of this month.

January’s dive in revenues was largely driven by Greeks holding off before the vote in the belief that a government led by the radical Syriza party would abolish some unpopular measures such as the ENFIA property tax.

Athens says its financing needs are manageable while it negotiates a deal, and has not said how long it can survive without fresh aid.

The government said it was confident of recouping the shortfall. “There are tax obligations that have been delayed and we are sure that we will collect them in the coming months,” Deputy Finance Minister Dimitris Mardas told Reuters.

Prime Minister Alexis Tsipras’s government has outlined plans to replace the property tax with a new levy on high-end property from next year. But another deputy finance minister, Nadia Valavani, told parliament on Tuesday: “We are asking all citizens who want this government to implement its policies … to pay the last instalment of the ENFIA property tax for February and the previous one for January.”

The poor tax collection data helped to push Greece’s central government administration surplus also below target.

This excludes the budgets of social security organisations and local administrations and is different from the figure monitored by Greece’s EU/IMF lenders, but indicates the country’s progress in repairing its finances.

The surplus was 443 million euros in January, well short of the 1.37 billion euro budget projection.

(Additional reporting by Stephen Grey, Writing by Deepa Babington; editing by David Stamp)

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This article originally appeared at Reuters. Copyright 2015. Follow Reuters on Twitter.

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