Squeeze on Greek families gets worse

Squeeze on Greek families gets worse

The average burden on Greek workers in the form of taxes and social security contributions grew for a second year in a row in 2017, in contrast to the general trend among the member-countries of the Organization for Economic Cooperation and Development.

The OECD’s data included in the report published on Thursday on the taxation on salaries confirm that overtaxation of salary workers in Greece is growing, especially for families with children who in other countries pay particularly low taxes. The burden on Greek families is so great that it even exceeds the traditionally high taxation in Scandinavian countries. Despite the government’s claims about strengthening its social policy measures, the burden on Greek families actually grew in 2017.

The average burden on a Greek salary worker (without a family) from taxes and social security contributions amounted to 40.8 percent of his/her salary last year, including their employer’s contributions. This was up on the 40.5 percent rate in 2016 and 38.8 percent in 2000. The burden on the 35 OECD member-countries averaged at 35.9 percent last year, down from 36 percent in 2016 and 37 percent in 2000.

The tax and social security burden on salary workers increased when the country entered the bailout mechanism, then it started to ease before reverting to an upward trend in 2015.

The average burden on a salary worker with two children amounted to 38.98 percent in 2017, against 38.65 percent a year earlier, taking Greece to second in the chart of the countries with the greatest burden, only behind France (which has a 39.44 percent rate). Notably, Greece has a greater burden than Finland (38.4 percent) and Sweden (38.2 percent), and is far above the OECD average rate of 26.1 percent. In 2016 Greece had stood in fourth place.

The OECD report attributes Greece’s ascent of the chart by two places to the fact that the tax discounts for households with children and the various family handouts reduce the burden on an employee with two children by just 1.8 percentage points, against an OECD average discount of 9.8 percentage points.

The report adds that the average father of two brings home only 76.3 percent of his gross salary, compared with the average rate of 86 percent in OECD countries.

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