Commentary
If there is one urgent reform that the new economy minister has to carry out, that is the introduction of a new tax scale for incomes and profits. It is worth citing a recent court decision, which estimated the annual income of a worker with two jobs at 7.5 million drachmas (22,000 euros). The court decided that this was the amount that a car driver had to pay in compensation for injuring a migrant worker who was working at a building site in the morning and as a pizza delivery man in the evening. One should not rush to rule out this estimate as irrational. Several hundred thousand workers earn a total income ranging from 5 to 9 million drachmas by working in two jobs at the same time. According to data provided by the National Economy Ministry, this corresponds to 720,000 people, that is only 16 percent of tax payers. Above this number and up to the 15-million-drachma threshold there are 350,000 people (7.5 percent of tax payers). Fifty-nine thousand households, that is 1.3 percent of the total number, are classified as above the 15-million-drachma threshold, which is, according to tax authorities, the highest income bracket. Hence those who declare more than 9 million drachmas pay 53 percent of total income tax, with those above the 15-million-drachma threshold contributing 25 percent. The conclusions are obvious: The official incomes of the country’s inhabitants are low, but this is not reflected in the country’s living standards. Clearly, there is considerable tax evasion among middle-income groups, which is even greater among higher income groups. Tax policy is out of date and out of place. It continues to ignore and close its eyes to the reality of the black economy. It has failed to crack down on real and large-scale tax evasion. It punishes those who declare their actual income from work. It maintains numerous disincentives to truthfulness in tax declarations. It maintains a counterproductive tax system. The economy needs a tax revolution. This would apply to household incomes and, even more so, to business earnings.
