In the coming days, a new Medium-Term Programme for tax cuts from 2023 and mainly in 2024 and 2025 will be submitted to Brussels.
The prospect of tax cuts comes from the high primary surpluses that are projected provided that the targets are revised down to 2% or 2.2%.
Regardless of the looming revision of the European fiscal rules, in 2023 fiscal policy is adjusted to target a primary surplus of 2% of GDP, which is expected to rise to 2.8% of GDP in 2024 and 3.7% of GDP in 2025.
Insistence on reform of the Stability and Growth Pact.
The estimates of the economic staff predict that there will be an additional fiscal space of 0.5% to 1% of GDP, i.e. between 1 and 2 billion. resulting from the medium-term target of 2.2% of GDP and the projected primary surplus of 3.7% of GDP.
In 2022, fiscal rules will not apply again, as the escape clause will be implemented.
The package of measures to reduce taxes and social security contributions will be implemented in line with developments in the economy and public finances.
Accelerating growth based on tax policy is the goal.
According to the findings of international and domestic organisations and analysts, one of the most important obstacles to productive recovery and improved competitiveness is the high tax burden on labour and business.
The timetable for the changes is as follows:
2022
Suspension of the solidarity levy for private sector employees, income from business activity, rent, interest, dividends.
Maintaining the three-point reduction in contributions and a half percentage point reduction in supplementary insurance contributions.
Reduction of ENFIA by 8% with the implementation of the new property values. Possibly to be implemented from 2023.
2023
Complete abolition of the solidarity contribution for private – public sector and pensioners.
A further reduction in insurance contributions by 0.60 percentage points.
A 50% reduction of the business tax.
Reduction of the corporate tax rate to 20% from 24.
2024
Abolition of the business tax.
Establishment of two basic VAT rates of 11% and 22%, from 13% and 24% today, while maintaining the reduced VAT rate at 6%.
Velissarakos Efstathios
Accountant – Tax Consultant
