Carrot and stick for the self-employed
Plan is to implement tax evasion measures before proceeding with promised tax cuts
Prime Minister Kyriakos Mitstoakis signaled his intention on Wednesday to start delivering the measures to reduce tax evasion before proceeding with promised tax cuts.
The move is a signal at home for tax compliance, but also to markets that the government is proceeding with fiscal caution.
During his visit to the Finance Ministry on Wednesday, Mitsotakis announced that a bill to be passed before the closure of the Parliament for the summer recess will include the measures promised by the New Democracy party for 2024.
It was originally thought that the promises would be institutionalized for the entire four-year period. Thus, the gradual reduction of the fee self-employed persons must pay to practice certain professions (“telos epitidevmatos”) – which wouldn’t have started until 2025 anyway – and the phasing out of the method of using assets to determine a taxpayer’s real income (“tekmiria diaviosis”) will be left out of the bill.
It should be noted that the government’s pre-election announcements stated that the fee for practicing certain professions will be reduced by 20% in 2025, another 30% in 2026 and will be completely abolished in 2027, when the cost will reach 447 million euros.
Similarly, the phasing out of the method of using assets to determine a taxpayer’s real income is foreseen from 2025 at a cost of 8 million euros.
“Before the summer recess of the Parliament, the first bill of the Ministry of National Economy and Finance will have been passed, which will now reflect the central election commitments that New Democracy had presented before the elections, concerning the next year, 2024,” Mitsotakis said after his meeting with Finance Minister Kostis Hatzidakis and the economic staff. “Many of them will have a significant financial impact on citizens’ incomes and this bill will be passed, as I said, before the beginning of August,” the PM added.
The same bill will also include provisions for the new civil servants’ salary scale, which will come into force from 2025 and will cost 500 million euros for the preliminary budget.
The pay scale will provide for increases averaging 4%, but the raises of low-paid workers are expected to exceed 10%, while high salaries will move up 2-3% plus responsibility allowances, which will increase, as will child allowances.
