ECONOMY

Workers in Greece see deductions grow

workers-in-greece-see-deductions-grow

Taxpayers in Greece have been seeing their incomes shrink each year due to the taxes and social security contributions that employers and workers have to pay, and Organization for Economic Cooperation and Development (OECD) data point to the growing deductions of crisis-riven Greeks, in contrast to the trend in other member-states.

According to an OECD study, an unmarried worker in Greece was last year expected to pay 40.9 percent of his gross income toward taxes and social security contributions, up 0.15 percent from 2017, while the mean rate among OECD members stood at just under 36.1 percent.

Among the 36 OECD member-countries Greece had the 13th highest tax and social security load. This increase stemmed from tax hikes, the survey showed.

OECD records show that the same worker would have had 38.8 percent of his income deducted for taxes and contributions in 2000, rising to 43 percent in 2011 before easing to 39.1 percent in 2015. Since then, that figure has been rising constantly. In contrast, the mean OECD rate slipped by 0.16 percent in a year, from 36.22 percent in 2017 to 36.06 percent in 2018.

The situation has not improved for families with children either, despite the numerous government handouts. Although there has been a small drop in rates since 2017, Greece is still the country with the third heaviest tax and social security burden on households with children. The report notes that the benefits policy last year eased the total tax load on families with one worker and two children by 1.08 percentage points. The 37.9 percent rate remains the highest among OECD members with the exception of France and Italy.

By the same token, the tax and social security dues deducted from the income of a four-member household with both parents working amounted to 38.4 percent in 2018. The slight reduction of that rate is due to child benefits rather than tax reductions, which creates a distortion in Greek economic activity.