Greece’s government is collecting more tax even as households feel increasingly squeezed, underscoring how inflation can bolster public finances while eroding consumers’ purchasing power.
Value-added tax and excise duties generated €25.2 billion ($29.6 billion) in the first eight months of 2026, or 50.9% of Greece’s €49.5 billion in total tax receipts. Overall tax revenue rose 6.4% from a year earlier and exceeded the government’s budget target by €1.8 billion.
The biggest boost came from VAT, a levy charged on most goods and services. VAT receipts jumped 13% to €20.5 billion, €1.2 billion above target, and now account for roughly 42 cents of every euro collected in taxes.
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That performance partly reflects the mechanics of inflation. VAT is generally calculated as a percentage of a product’s selling price, meaning higher prices can lift government revenue even without an equivalent increase in the volume of goods purchased.
Excise duties tell a different story. Revenue from those taxes, imposed on products including fuel and tobacco, fell 4% to €4.7 billion and missed the budget target by €230 million. The largest shortfall was in energy products.
Unlike VAT, fuel excise revenue depends more heavily on quantities consumed and fixed tax rates. As fuel consumption declines, excise receipts can fall. But higher pump prices can simultaneously increase the VAT collected on each liter sold.
The divergence illustrates an uncomfortable feature of Greece’s fiscal picture: weaker consumption volumes don’t necessarily translate into weaker tax receipts when prices remain elevated.
Household budgets show why. Based on Greece’s official household-budget survey, an average household spent about €1,820 a month in 2025. Assuming 3.6% inflation and a 4.3% increase in housing costs, maintaining roughly the same consumption pattern would cost around €1,888 a month in 2026—about €800 more a year.
Food, housing and transportation already absorbed nearly 49% of average household expenditure in 2025. For the poorest fifth of households, food and housing alone accounted for 54.4% of spending.
