ECONOMY

Salary, pension boost borders on negligible

salary-pension-boost-borders-on-negligible

The package of measures announced by Prime Minister Alexis Tsipras last week translate into an additional income of less than 50 euros per month for the average pensioner and just 25-30 euros more for the average worker.

While the measures for 2019 and 2020 have a budget of more than 4 billion euros, including those already voted into law, the actual benefit to citizens’ incomes will come to just 2 billion euros from all the measures – the payment of a handout described as a “13th pension,” the value-added tax reduction and the drop of the solidarity levy.

In practical terms, the bulk of the package is geared toward averting the reduction of the tax-free threshold so as to avoid losing any disposable income. On the other hand, measures that could have bolstered the purchasing power of the middle classes, such as the planned reduction of the Single Property Tax (ENFIA) or the drop of the lowest income tax bracket rate from 22 percent to 20 percent, will not be implemented.

Moreover, the method for calculating the solidarity levy announced is less favorable than what had been originally planned in the context of the so-called offsetting measures for next year. Crucially for the vast majority of taxpayers, with a personal income up to 12,000 per year, there will be no changes in their tax this year or next.