Greece – Mitsotakis announces long list of tax breaks, rate reductions in bid to boost recovery

Greek Prime Minister Kyriakos Mitsotakis on Saturday evening announced a veritable “grocery list” of individual income and corporate tax breaks and reductions on everything from cell phone use fees to property rates, and accompanied by an extension of lower VAT rates on a bevy of goods and services.

Mitsotakis made the announcements during a widely broadcast state-of-the-economy address to inaugurate the annual Thessaloniki International Fair (TIF), the venue where Greek premiers announce coming fiscal and economic policy.

By all accounts, the center-right wants to boost annual growth in the post-pandemic recovery period to make up the Covid-related losses, with the burden on public debt “kicked down the road”.

In terms of the all-important caste of “middle class” voters, the pro-reform and pro-business Mitsotakis said a tax on parental inheritances and grants will be abolished, up to a value of 800,000 euros, while an unpopular “solidarity contribution” – enacted by the previous SYRIZA government and affecting anyone with a gross income of above 20,000 euros per year – will also remain inactive for 2022.

In terms of measures to boost employment in the east Mediterranean country, which is plagued by the highest jobless rate among young adults, social security contributions will be slashed in the private sector – a measure costing public coffers 1.58 billion euros per year.

The corporate tax rate will be decreased in 2022 from 24 to 22 percent, a nod to the business sector.

Additionally, continued rebates will be extended to businesses affected by the ongoing pandemic.

On the “collection” side, he announced a three-year pilot program whereby electronic payments made to specific categories of professionals, such as craftsmen, lawyers and physicians, and up to 5,000 euros per year, will be deducted from income taxes.