Home » Business » Taxation: The government’s plan to reduce taxes and levies by 2027 –

Taxation: The government’s plan to reduce taxes and levies by 2027 –

Interventions in the personal income tax scale, the abolition of the business tax, a further half-percentage point reduction in social security contributions and a “haircut” of the living standards are included in the government’s plan, which will be rolled out until 2027.

The way for new permanent tax relief for households and businesses will open as cracking down on tax evasion brings additional revenue to government coffers. “As much as tax evasion is reduced, as much as the loophole in VAT is narrowed, as much as large tax or customs frauds that require a specialization become more common, more revenue will be added to the state’s coffers, so that we can continue with the policy of reducing taxes, something which we intend to do until at least the end of our government term, in 2027,” said the Prime Minister while inaugurating the new AADE building in Tavros yesterday.

«We are at constant war with tax evasion” underlined Kyriakos Mitsotakis, and in this battle, which “will support public revenues and lead to further tax reductions”, the new tools of technology, especially the tools of artificial intelligence, will contribute, which, as the Prime Minister noted, “they enable us to make much more targeted checks, which will allow us in a large set of data – which at first glance may not make much sense – to identify those elements that need further investigation».

The new tax cuts

The road map with the interventions on the tax front that will be gradually rolled out until 2027 and depending on the revenue collection performance of the anti-tax evasion measures includes:

  1. “Cut” by 30% of the subsistence allowance with the aim of eliminating distortions and injustices and a fairer distribution of tax burdens among households. It is noted that under the current regime hundreds of thousands of citizens are required to pay a higher tax than what is proportional to their income based on imputed living expenses such as cars, houses, purchases of goods, private school fees, pleasure boats, etc. . In fact, the data shows that most taxpayers who are caught in the trap of living presumptions are employees and pensioners mainly with low incomes who pay extra taxes because they live in a self-owned or rented house and have a car.
  2. New reduction of insurance contributions by 0.5%. It is recalled that from January 1, 2025, the insurance contributions will be reduced by one unit.
  3. Abolition of the pretense fee for businesses and their branches. It is noted that in 2025 the pretension fee is abolished for all freelancers, self-employed, sole proprietorships and workers with a “block”.
  4. Changes to the personal income tax scale with rate reductions mainly for middle income earners. Under the current regime, natural persons with income from wages, pensions, business activity are taxed at rates starting from 9% for the first 10,000 euros and reaching up to 44% for incomes over 40,000 euros. It is worth noting that the interventions made in 2020 in the tax scale mainly favored freelancers and the self-employed, as with the application of the 9% rate for the first 10,000 euros of their income, they had an annual benefit of 1,300 euros, while for incomes from 20,000 to 50,000 euros the relief was only 17 euros per year.

Source: ot.gr

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