ECONOMY

One fifth of Greeks covering 83 pct of annual income taxes

One fifth of Greeks covering 83 pct of annual income taxes

The left-led government’s blase response to criticism of its overtaxation of the middle class can be explained by the fact that it actually only affects a relatively small section of the population: From a total of about 8.8 million taxpayers, 80 percent, or 7.1 million, pay from zero to 100 euros per month in taxes. As for the Single Property Tax (ENFIA), four in five property owners also pay from zero to just 42 euros per month.

An analysis of tax declarations reveals that 80.8 percent of taxpayers – those who declare a low income – are responsible for just 16.8 percent of the total income tax on individuals, meaning that the remaining 83.2 percent of that tax is covered by 19.2 percent of Greeks.

This is because 7,091,832 taxpayers pay an average of 190 euros per year to the tax authorities, while 1,676,485 taxpayers with relatively higher incomes pay 21 times more on average, or 3,985 euros per year. It also explains why Finance Minister Euclid Tsakalotos had no qualms about admitting to overtaxing the middle classes, given that four in five Greeks are not actually affected by it.

With the exception of the reduction of the tax-free threshold – which was something the country’s creditors insisted on so as to broaden the tax base – all of the other measures adopted by this government have contributed to concentrating the burden on a small section of the population: changes in the calculation of social security contributions and the solidarity levy, the new income tax brackets, changes to the way freelance professionals are taxed, the increase of the burden on people who receive both a salary and work freelance, and shifting part of the ENFIA load through the supplementary property tax.

In ENFIA’s case in particular, from a total of 6,390,936 individuals who receive a payment notice, some 77 percent, or 4,924,012 property owners, have to pay no more than 500 euros per year. This adds up to 911 million euros, which is only one third of the amount individuals pay for the property tax. Consequently, the remaining 1,466,924 people, or 23 percent, have to cover the rest, which is 1.8 billion euros or two thirds of the ENFIA collections the Finance Ministry expects every year from individuals.

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