Income data point to full recovery
Yet another crucial indicator, that of incomes declared to the tax authorities, confirms that the cycle of the 10-year debt crisis and bailout has closed. This year’s declarations are expected to bring the total declared incomes back above 80 billion euros, a level that has not been recorded since 2012.
Furthermore, the processing of the statements submitted in 2021 has shown that despite the pandemic, incomes did not decrease in 2020. In fact, dividend revenues jumped to €6.1 billion from €2.6 billion the previous year.
Both the clearance process of this year’s tax returns and the receipts from withholding on wages and pensions are encouraging news for the Finance Ministry, which appears to be finding a new ally in the government’s effort to secure additional fiscal space.
This outperformance is due to two main reasons: Declared incomes increase month after month, and the tax rate on this additional income increases in several cases.
The 7% increase to the minimum salary has pushed the wages of hundreds of thousands of workers above the tax-free threshold, triggering the withholding of tax for them too, a revenue that grows constantly as salaries increase.
