Greece continues to stand out among EU countries for its heavy reliance on indirect and property taxation, a trend that disproportionately impacts lower-income households.
According to the European Commission’s Annual Report on Taxation 2025, released recently and covering fiscal data from 2023, there is a clear imbalance in Greece’s tax structure favoring indirect consumption taxes over direct income-based levies.
The report reveals that indirect taxes in Greece amounted to a significant 17.3 percent of GDP, placing the country fourth highest among the EU’s 27 member states.
This high reliance on indirect taxes, such as VAT and special consumption taxes, impacts lower-income households much more so than financially healthier households. As indirect taxes are applied uniformly regardless of income, they consume a larger proportion of disposable income from less well-off individuals and families, who spend a greater share of their earnings on basic necessities. While the absolute tax liability remains the same for everyone who purchases a taxed good, the relative burden on more impoverished individuals is substantially higher.
Notably, 44.4 percent of Greece’s total tax revenue in 2023 stemmed from consumption taxes, a figure significantly higher than the EU-27 average of 33.2 percent. Overall, indirect tax revenues totaled 38.9 billion euros, with VAT alone accounting for 8.8 percent of GDP, ranking Greece 11th on that specific metric.
Greece’s high special consumption taxes—imposed on fuel, alcohol, and tobacco—were particularly striking, reaching 5.2 percent of GDP, the second highest rate among EU member states. Environmental taxes also stood out at 4.1 percent of GDP, again the second highest in the bloc, further contributing to the regressive nature of Greece’s tax burden.
In contrast, the picture shifts significantly when it comes to direct taxes. Greece lags behind the EU average, with direct taxes—including personal and corporate income taxes—amounting to just 10.4 percent of GDP, placing the country 16th in the EU ranking.
Personal income taxes contributed only 5.9 percent of GDP (18th place), while corporate income taxes accounted for 2.9 percent of GDP (17th place), underscoring the stark imbalance in Greece’s tax structure.
According to the Commission’s figures, Greece’s total tax revenue in 2023 amounted to 38.9 percent of GDP, just shy of the EU average of 39 percent. However, this total masks a heavy reliance on taxes that disproportionately affect those with less disposable income, raising concerns about equity within the Greek fiscal system.
Indirect taxes in Greece influential in cost of living crisis
High indirect taxes in Greece significantly impact the cost of living by directly increasing the prices of goods and services that consumers purchase. This effect is known as cost-push inflation, whereby the burden of the tax is ultimately shifted to the end consumer.
Last year, Greece’s Prime Minister Kyriakos Mitsotakis unveiled several handouts aimed at supporting citizens. He outlined plans to increase pensions, reduce social security contributions, and improve public services to win back voters angered by a lingering cost-of-living crisis.
“I am determined to honor your confidence. Putting into practice the commitments for which the citizens elected us. So that every citizen throughout the country enjoys prosperity by 2027,” Mitsotakis promised.
Related: Greeks Worked 179 Days in 2021 Just to Pay Taxes
See all the latest news from Greece and the world at Greekreporter.com. Contact our newsroom to report an update or send your story, photos and videos. Follow GR on Google News and subscribe here to our daily email!
