SALARIES

Deductions to go down to OECD mean rate by 2023

deductions-to-go-down-to-oecd-mean-rate-by-2023

By 2023 the deductions imposed on private sector salaries will cease to be above the European Union average and also the mean rate of Organization for Economic Cooperation and Development (OECD) member-states.

This is the next step in the implementation of a government plan that began in December 2019 and, according to the timetable, will be completed either by July 2022 or by early 2023.

The social security contributions will be slashed twice more, by half a percentage point per annum. The solidarity levy will remain suspended in 2022 for all private sector employees even if this freezing will remain of a temporary nature. The aim is to abolish the levy permanently as of 2023 for all workers.

This plan, which will bear an annual fiscal cost of 3 billion euros when fully implemented, will bring down the average rate of salary deductions for tax and social security to around 36%, where the average rate of the OECD member-states stands too.

That target also corresponds to the proposal by the expert Pissarides Committee for the reduction of deductions especially in incomes from salaries.