People living in Greece last year spent 179 days working in order to pay their taxes and social insurance contributions according to a study released Wednesday.
Greeks had to work for the state 179 out of 365 days in 2021, up from 174 the previous year.
The study, the seventh of its kind, said the day of “tax freedom” – after which any income earned by tax-payers from all sources fully belongs to them – arrived on June 29.
If the public deficit is also factored in, then the day of tax freedom is delayed until August 10, or 221 days of work.
Total tax burden in Greece at 71.9 billion euros
For 2021, the total tax and social insurance burden on households and businesses will be 71.9 billion euros and is almost double the 44 billion euros that households pay to cover their basic expenses for food, clothing, housing, household goods, transport and communication.
“In 2021 we will have to work for 75 days to pay indirect taxes, 60 days to pay social insurance contributions, 43 days to pay direct taxes and one day to pay taxes on capital,” said the research program coordinator Konstantinos Saravakos.
During 2020, by contrast, Greeks had to work 175 days for the state and, if the general government deficit was also factored in, Tax Freedom Day came 42 days later, on August 6. This followed a pattern over the last 20 years that saw 47 days added to the period before “Tax Freedom Day.”
In the last three years there appears to have been an improvement in Greece’s record: From the 186 days of annual work it took in 2018 to cover tax and social security obligations, this dropped to 181 days in 2019, 175 in 2020 and 179 this year.
The Centre’s president Alexandros Skouras said that the data indicates a sharp increase of the tax burden on households and businesses during the debt crisis years but also a containment of this trend in the last two years.
Factoring deficits into the calculation, which was introduced for the first time this year, also indicates that the emergency spending triggered by the pandemic must be taken into account when shaping economic policy in coming years.
“Psychological threshold of 180 days”
Responding to the findings, the Minister of Development and Investment, Adonis Georgiadis, said that “despite the pandemic, the government, for the second consecutive year, manages to keep working days to fulfil tax obligations below the psychological threshold of 180 days, a threshold that the SYRIZA Governments exceeded every year.”
He blamed the small increase between 2020 and 2021, from 175 to 179 days, to lower tax revenues of 2020 due to the pandemic and, most importantly, to the smaller GDP, therefore to a smaller denominator.
“In fact, with the GDP of 2019, we would already be much better. We will continue the effort to bring down taxes,” Georgiadis said.
According to the International Tax Competitiveness Index (ITCI), published by the Tax Foundation, a US think tank established in 1937, Greece is in the 29th place out of 36 OECD countries in terms of tax competitiveness.
The ITCI considers more than 40 variables across five categories: Corporate Taxes, Individual Taxes, Consumption Taxes, Property Taxes, and International Tax Rules.
It attempts to display not only which countries provide the best tax environment for investment but also the best tax environment for workers and businesses.