October 12, 2011 / 7:41 AM / 8 years ago

UPDATE 1-Greece's deficit still growing after tax moves

* Central govt budget gap up 15 pct y/y in Sept
    * Recession hurts, increases social spending, govt says
    * Govt says tax receipts to rise in final quarter of year


    ATHENS, Oct 12 (Reuters) - Greece's budget deficit continued
to widen in September due to an austerity-driven recession,
despite a fresh batch of tax measures that were supposed to
start lifting receipts.	
    The central government deficit grew 15 percent year-on-year
to 19.16 billion euros in the first nine months of the year,
finance ministry data showed.	
    Debt-laden Greece is scrambling to meet fiscal targets set
by its international lenders under a bailout plan so that it can
continue to receive EU/IMF funding and avoid default.	
    In September, Athens increased sales tax on restaurants to
23 percent and started collecting a one-off tax ranging from 1-5
percent on gross income.	
    But the moves failed to visibly boost net tax receipts,
which shrank by 4.2 percent year-on-year in Jan-Sept, compared
with a 5.3 percent drop in the first eight months of the year.	
    Greece said on Wednesday it would catch up with a target to
increase net tax receipts by 0.8 percent for the full year,
helped by a new property tax and other spending cuts that will
kick in in the rest of the year.	
    "The current revenue shortfall is expected to be dealt with
in the last quarter," the finance ministry said.	
    Greece's international lenders said on Tuesday that Greece
would miss its budget deficit target this year, but that it
could catch up in 2012 if it acts decisively enough.
 	
    Primary spending before interest payments rose by 2.9
percent year-on-year, mainly because the government increased
payments to social security organisations, whose revenues are
drying up because of the recession.	
    	
             Jan-Sep     Jan-Sep    Change (%)  9-month  	
             2010        2011                    2011  	
                                                 target 	
 Net         36.507      34.980      -4.2        34.974 	
 revenue                                          	
 Spending    49.067      52.488      7.0         52.475 	
 Public                                           	
 Investment                                       	
 revenue     1.348       1.877       39.2        1.878 	
 outlays     5.438       3.532      -35.1        3.619 	
 Deficit     16.650      19.163      15.1        19.242
0 : 0
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