Greece expects 1.5 billion euro VAT revenue increase due to inflation

The Greek government expects to collect an additional 1.548 billion euros in VAT revenue in 2026 due to the impact of high inflation. According to draft budget estimates, total VAT revenues are projected to rise to 30.777 billion euros, up from the original target of 29.229 billion euros.

This increase is attributed to a “tax multiplier” effect where higher transaction values automatically increase tax collections even without changes to tax rates. While VAT revenues rise, revenues from Special Consumption Taxes on fuels are expected to fall by 283 million euros compared to targets, reaching 7.176 billion euros. This decline is driven by reduced fuel consumption as households limit spending to cope with high energy costs.

To mitigate the cost of living crisis, approximately 1 billion euros in interventions have already been deployed, funded by underspent 2025 budgets and permanent revenue from digital work cards.