Private sector salary workers, freelancers and self-employed professionals, as well as those with revenues from rents and dividends, will also be spared next year’s solidarity levy on their 2021 incomes.
That means that the increase in incomes – through the suspension of the levy and the reduction of social security contributions by three percentage points – will be maintained in 2022 too.
This suspension of the levy for 2022, after this year, practically signals its abolition, as 2023 will likely see a general election when it will be particularly difficult for the government to reinstate a tax that mainly affects middle incomes and was characterized as extraordinary in the bailout years.
Alternate Finance Minister Thodoros Skylakakis told Thema 104.6 FM radio station on Monday that the ministry intends to extend the freeze on the levy for next year too, along with the reduction of contributions, following the European Commission decision to continue with the relaxation of its fiscal rules. Prime Minister Kyriakos Mitsotakis has even stated that the government’s intention is to reduce social security contributions further.
Skylakakis said that “for 2022 our projection is that there will be no solidarity levy for the private sector. What I cannot say yet is whether there will be an expansion in the suspension for the others” – meaning beyond private sector workers.
That way more than 1.2 million taxpayers will be relieved of the solidarity levy and high contributions, with the cost to the budget coming to 1.5 billion euros.
For the 2020 financial year the levy has been suspended for incomes from business activities, capital and the capital gains from sources such as asset sales, interest etc, and for 2021 for revenues from salaried labor. The levy has already been suspended for them since January according to their monthly salaries, while freelance and self-employed professionals, farmers and those with incomes from rent etc will not pay any levy upon the processing of their tax declaration.