Greece’s Tax System Relies Heavily on Indirect Taxes

Greece depends far more on consumption‑based taxes than most EU members. In 2024, indirect taxes accounted for 17.1% of Greece’s GDP, giving a ratio of €1.51 in indirect tax revenue for every €1 of direct tax revenue. By contrast, the EU average for indirect taxes is 12.9% of GDP with a ratio below one.

Compared with large European economies, Greece’s reliance is markedly higher than Germany (0.80), Italy (0.90), Spain (0.88), the Netherlands (0.75) and Belgium (0.69). Only Portugal shows a similar dependence. High VAT rates and lower household purchasing power intensify the burden on low‑ and middle‑income families, who spend a larger share of income on non‑elastic items such as food, housing, energy and transport.

The structure also means that rising inflation automatically boosts indirect‑tax collections, increasing state revenue without improving real wages. The 2026 budget projects €44.9 billion from indirect taxes versus €28.1 billion from direct taxes, reinforcing the policy focus on consumption taxation.