The ambitious package announced by Prime Minister Kyriakos Mitsotakis at the Thessaloniki International Fair (TIF) last weekend is seen as a reflection of the government’s much-touted bid to spur the economy and to hit the ground running in the fall.
Mitsotakis announced 25 measures to cultivate an environment conducive to investments and entrepreneurship, and to ease the burden on the country’s taxpayers.
At the forefront of these measures is the the reduction of corporate tax from 28 to 24 percent, the halving of taxation on dividends to 5 percent, as well as the easing of social security contributions and other measures.
Equally important for the day-to-day workings of businesses is the simplification of the country’s complex tax code and environmental licensing, the bankruptcy law, and the creation of a national infrastructure register and a unified digital map, so that investors can find out what they can do and where they can do it.
The government also seeks to ease the burden on individual taxpayers and self-employed professionals by lowering the tax on annual incomes up to 10,000 euros from 22 percent to 9 percent, which will be included in a draft bill that will be tabled in Parliament soon.
This will lead to gains of 177 euros per year for wage earners and pensioners and 1,300 euros for self-employed professionals.
Moreover, the new tax framework will also entail significant benefits for middle-income earners, who will see their tax bill shrink. For instance, a wage earner with two children and an annual income of 40,000 euros will pay 540 euros less in taxes in 2020.
At the same time, the tax-free threshold for employees and pensioners – currently at 8,636 euros – will be maintained, while social security contributions will also be gradually decreased as of July 2020 by 5 percent up until 2023.
In addition, Mitsotakis also announced that the solidarity tax which was introduced at the height of Greece’s financial crisis and a levy on self-employed professionals will be slashed in 2020, when there will be the fiscal space to do so.