The analysis indicates that there are considerable differences amongst the effective tax rates, and therefore the allocation of the tax burden between different sources of income, when comparing Greece and the Euro Area.
In particular, the largest difference between the tax systems of Greece and the Euro Area countries concerns the effective tax rate on selfemployment income, which in Greece is significantly lower. This difference perhaps explains the higher number of self-employed in Greece vis-à-vis the Euro Area.
Moreover, as 59% of the capital income tax base in Greece consists of self-employment income, their low taxation partially justifies the low effective tax rate on capital. A notable difference is also evident when considering the effective tax rate on consumption, which in Greece is quite lower than the corresponding Euro Area average rate. This low rate, combined with the low rate on the self-employed, might explain to some extent Greece’s lower aggregate tax revenues compared to the Euro Area.