In a statement to the Athens-Macedonian News Agency (ANA-MPA) on Sunday, Greece’s Economy and Finance Minister Kostis Hatzidakis announced that part of the additional revenue generated from efforts to curb tax evasion will be directed towards tax reductions.
This commitment aligns with the government’s broader strategy to enhance social policy while increasing public revenues.
Hatzidakis highlighted the significant progress already made in tackling tax evasion, noting that eleven initiatives have been implemented to boost revenue collection. He reported a notable 10.3% increase in VAT revenue during the first half of the year compared to the same period last year, attributing this rise to both economic growth and effective measures against tax evasion, including the integration of POS terminals with cash registers.
“Our goal is to continue reducing tax burdens, and we plan to introduce twelve additional measures next year aimed at lowering taxes and contributions,” Hatzidakis stated. He projected that, by 2027, these efforts could lead to an annual increase in state revenues of approximately €2.5 billion, providing a concrete response to the social inequities caused by tax evasion.
The minister emphasised that reducing tax evasion is a key priority for the ministry. “This initiative serves as a tool to ensure that those who comply with tax obligations ultimately pay less,” he remarked.
To support these goals, the ministry has outlined a multi-year plan that includes several key strategies:
1. Reduction of Social Security Contributions: A proposed reduction of 0.5% in social security contributions is planned for 2027, amounting to a total decrease of one percentage point.
2. Reduction of Presumptive Income Taxation: Starting in 2026, the government intends to reduce presumptive income tax by 30%, with the long-term objective of complete abolition, facilitated by digital tools to accurately assess incomes and assets, thereby addressing inequalities for low-income citizens.
3. Abolition of Entrepreneurs’ Levy: The levy imposed on freelancers and one-person companies is set to be eliminated by 2025.
4. Reduction of VAT Rates: The standard VAT rate is proposed to decrease from 24% to 22%, while the reduced rate is expected to drop from 13% to 11%.
5. Income Tax Revisions: Changes will be made to income tax policies, particularly benefiting middle-income earners.
The successful implementation of these initiatives will rely heavily on the Independent Authority for Public Revenues (AADE) effectively tracing and preventing tax evasion, Hatzidakis concluded.
(Source: Amna)