BUSINESS

Budget foresees little tax relief for Greek middle class

THANOS TSIROS

TAGS: Economy, Society

Despite shouldering the lion’s share of the tax burden during Greece’s protracted financial crisis, middle-class wage-earners are set to continue doing so in the foreseeable future, according to the new tax scale included in the 2020 budget which stipulates that those earning more than 1,000 euros will see reductions of just 1.5-2 percent.

Overall some 1.34 million taxpayers, mostly wage earners or pensioners, declared an annual income of between 16,000 and 50,000 euros in 2018. The burden on them is reflected in the fact that although they account for just 15 percent of the total number of taxpayers, they paid a total of 4.4 billion euros to the tax office or 53 percent of the total income tax on individuals.

Of the 1.2 billion euros earmarked for benefits in the budget, only 281 million euros is seen going toward tax reductions for employees and pensioners. And of that 281 million euros, more than 150 million will be used to relieve those receiving an income of up to 1,000 euros a month. The rest will be allocated to taxpayers in the 16,000-50,000-euro bracket.

That 281 million euros will be allocated after the adoption of the new tax scale, which is scheduled to occur at the end of November.

The plan elaborated by the Finance Ministry includes the introduction of a 9 percent rate for those on incomes of up to 10,000 euros and a reduction of the tax deduction from 1,900-2,100 to 777-1,340 euros.

The draft has already been agreed upon with the country’s creditors and this is not expected to undergo any radical modifications.

A total of 8.9 million individuals file tax returns in Greece, which come to a total of around 73 billion euros.

Wages and pensions account for 83 percent of total income, as declared incomes from dividends and businesses have declined dramatically in recent years mainly as a result of overtaxation. Therefore it is salaried individuals and pensioners who are being called upon to shoulder the country’s tax burden.

The total income tax on individuals amounts to 8.3 billion euros.

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