State tax receipts reached €4.47 billion in the first seven months of 2026, up from €4.23 billion during the same period last year, providing the first indication of how the tax reform introduced at the beginning of the year is affecting public finances.
The 5.7% increase was driven primarily by VAT and corporate income tax. However, economist Tasos Yasemides noted that tax reform revenues are growing more slowly than the economy in nominal terms.
VAT and corporate tax drive increase
VAT receipts reached €1.83 billion between January and July, compared with €1.71 billion during the same period in 2025, an increase of 6.6%.
Corporate income tax generated €934.5 million, up 13.4% from €824.2 million a year earlier.
The picture was different for personal income tax, where receipts fell 3.6% to €694 million from €720 million.
Revenue from the Special Defence Contribution increased significantly, rising 19.9% to €340.2 million from €283.8 million.
Meanwhile, stamp duty revenue recorded a sharp 76.6% decline, falling from €26.5 million during the first seven months of 2025 to €6.2 million this year.
First signs of tax reform’s impact
The figures provide an early indication of the effects of the tax reform that came into force on 1 January 2026.
The reform increased the corporate tax rate from 12.5% to 15%, while deemed dividend distribution was abolished and the Special Defence Contribution rate on actual dividend distributions was reduced from 17% to 5%.
Stamp duty was also abolished, while the tax-free income threshold for individuals increased from €19,500 to €22,000.
At the same time, the Tax Department has stepped up its tax compliance campaigns.
Tax revenues growing more slowly than economy
Despite the overall increase, tax reform revenues have not kept pace with the nominal growth of the economy.
Yasemides, writing in an analysis for the 20 September edition of Simerini tis Kyriakis, noted that tax receipts increased by 5.7% during the first seven months of the new system, while nominal economic growth is estimated at between 6.5% and 7%.
“This means that tax revenues are not increasing at the same rate as economic activity,” he said.
According to Yasemides, the difference is particularly evident in the decline in personal income tax receipts, while the abolition of stamp duty has resulted in a substantial fall in revenue from that source.
Defence contribution increase may prove temporary
Yasemides also expects revenue from the Special Defence Contribution to gradually decline despite the sharp increase recorded so far this year.
“There is also an issue concerning the future picture of public revenues. The Special Defence Contribution appears to be increasing significantly, to €340.2 million,” he said.
“The majority of the increase is linked to the previous tax regime and profits from earlier years. With the changes that have already been decided, this source of revenue is expected to gradually decline.”
Yasemides said the expected reduction would need to be taken into account when planning future state budgets because the current level should not be considered a permanent source of revenue.
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