A mere 10 percent of Greece’s businesses are paying 88 percent of total taxes, with high taxation creating the largest obstacle to investment, employment, and growth, a study presented by Grant Thornton last weekend at the Growth Awards found.
More specifically, according to Grant Thronton’s study on Greek entrepreneurship, 60 percent of net profits recorded by companies in 2017 went to taxes. This, according to analysts, resulted in “takings after taxation not being enough to finance new investments”.
At the same time, though Greek companies appear to be entering a period of growth, increasing sales by 4 percent in 2017 and profits by 16 percent, ‘expansion’ is focused mainly on cost cutting rather than on extrovert initiatives, including much-needed upgrades.
According to study findings, 4 percent of gains from sales are reinvested, with eight in 10 of the survey participants saying that they do not intend to make any significant investments over the next 12 months.
The study assessed the results of 8,000 enterprises from 92 sectors in the 2011-2017 period.
In 2017, taxation accounted for 60 percent of all earnings against 58 percent in 2016, with 88 percent of total taxation in the last year of use falling on a mere 10 percent of businesses.
Despite the positive outlook for the coming period, the majority of Greek entrepreneurs are reluctant to invest not only in equipment but also in human capital. Six out of 10 polled said they had no plans to create new job openings or increase wages in the next 12 months.
Which means, according to Grant Thornton analysts, that the overall increase in business activity and profitability is still not sufficient to have a significant positive impact on employment or wages. At the same time, having relied on no financing, only one out of 10 respondents said they plan to develop their business ventures by tapping into new sources of funding. The majority, 7 in 10, said they would focus on introverted growth strategies, such as improving internal processes instead.
It should be noted that earlier this year, Grant Thornton’s International Business Report (IBR) found that deteriorating optimism among the country’s entrepreneurs had landed Greece at the bottom of a list of 35 countries on its global optimism index behind Turkey and Argentina.