Greek Prime Minister Kyriakos Mitsotakis announced on April 22 five measures to lower taxes and social security contributions for the country, effectively a reversal of tax hikes imposed by the previous government.
They are aimed at individual entrepreneurs, legal entities, businesses, and private-sector employees.
The Five Measures: Social Security and Taxes
- The permanent reduction of the tax advance paid by individual entrepreneurs performing a professional activity, from 100 to 55 percent as from this year
- The reduction of the tax advance paid by corporations from 100 to 70 percent in 2021, and next year, permanently to 80 percent
- The permanent reduction of corporate tax from 24 to 22 percent
- The measure introduced to the private sector this year of the reduction of social security insurance contributions by 3 percent to be extended to 2022
- The measure introduced to the private sector this year for the suspension of the special solidarity levy to be extended to 2022
Resetting the Greek Economy
The reductions, which equaled 2.5 billion euros for workers and businesses, were outlined during an online government meeting focused on resetting the Greek economy.
“The government has proved that its enduring priority is the reduction of taxation before and during the pandemic but also after it. Our primary concern after fighting the health crisis is the rapid recovery of the economy, and for this reason, we are today announcing five measures that will act as the basis, the foundation, for a decisive recovery,” Mitsotakis said.
He said the measures on taxes and social security were designed to help businesses that were adversely affected by the coronavirus pandemic, to energize the economy, and attract foreign investment.
Relatively Optimistic Annual Report
In the meantime Bank of Greece Governor Yannis Stournaras had reiterated a 4.2% growth recently in his somewhat optimistic annual report for 2020. Still, he warned of the Greek economy facing the bankruptcies of unsustainable enterprises after the year-long coronavirus crisis.
“The speed at which the economy will recover will depend on three crucial factors: the acceleration of vaccine rollout schemes at the domestic and global level, the maintenance of support targeting those worst hit, and the speed of the activation of the National Recovery and Resilience Plan,” Stournaras said.
Bankruptcies, job losses, and income decline will inevitably lead to an increase in private debt and a new rise in the already considerable volume of NPLs.
The new five measures to lower taxes and social security contributions are expected to offer relief.