Greece’s finance ministry announced another five pandemic-related relief measures on Thursday for businesses and private sector taxpayers.
Among others, a reduction in a tax prepayment for self-employed professionals is reduced to 55 percent from 100 percent, a measure that is permanent. Under the previous regime, a previous year’s revenue was used as the yardstick for pre-paying the upcoming year’s income tax.
The 100-percent tax pre-payment was amongst the most unpopular measures taken by the previous SYRIZA government, during its “tax tsunami” in 2016-17 to meet targets of the third memorandum bailout it signed with Greece’s European institutional creditors.
Another tax break, also permanent, is a reduction in pre-payment for business entities, from 100 percent to 80 percent. Specifically for 2021, the figure is 70 percent.
The income tax rate is also reduced – for 2021 incomes and revenues – to 22 percent from 24 percent. The measure marks a further tax reduction by the current conservative Mitsotakis government, which inherited the rate at 28 percent from the previous leftist government.
Just as importantly, Greece’s high social insurance contributions are cut, by three percentage points for wage-earners in the pandemic-battered private sector, as of 2022.
Finally, a “solidarity tax” will again be suspended for the private sector in 2022. That tax, tacked on to the normal income tax rate, was also legislated by the previous SYRIZA government, and generated heightened criticism because it affected people with above 20,000 euros a year in gross earnings.
