Greek taxpayers: Plan to review from scratch 1,047 tax deductions and exemptions

The pre-election announcements of New Democracy and SYRIZA to increase the tax-free limit and to reduce the tax burden on households and businesses pave the way for a review of tax exemptions and rebates from a zero basis.

Tax incentives to strengthen electronic transactions in order to limit tax evasion by concealing turnover by professionals and businesses are expected to be at the center of the new economic staff, while in the context of the new tax reform the tax exemptions and discounts that apply today are expected to be put on the table for the self-employed, professionals and small and medium-sized enterprises. Expenses that reduce tax or provide full exemption will also come under review.

The ten main categories

According to the data of the Ministry of Finance, the number of tax exemption categories currently stands at 1,047 with their fiscal cost reaching 12.88 billion euros.

The list of the 10 most basic categories of tax exemptions is as follows:

1. In personal income taxation, 231 tax exemptions are recorded that cost more than 5 billion to the budget with the number of beneficiary households amounting to 7,008,909. Typical cases are the tax reductions depending on family status (without or with dependent children) for 827,515 salaried, retired, professional farmers who avoided paying tax amounting to 3.81 billion euros and the exemptions for incomes but also for extraordinary fees/compensations/grants/financial aids granted in the context of the pandemic with their cost amounting to 1.04 billion. euros and benefit 2,356,503 taxpayers.

2. In corporate income taxation, there are 200 tax exemptions at a cost of 1.3 billion euros. 53,021 businesses are beneficiaries.

3. In capital taxation (ENFIA and EFA property taxes, inheritances, parental benefits, donations, transfers, etc.) there are 129 exemptions at a cost of 3.8 billion euros to the state coffers from 4.2 billion euros in 2021. Especially the exemptions in ENFIA amount to 84 million euros and are used by 5,044,977 taxpayers, in the Special Property Tax (EFA) the amount of exemptions for 8,499 owners reaches 3 .7 billion euros, in transfers the cost amounts to 84.8 million with 28,667 taxpayers taking advantage of the exemption given for the purchase of a first home.

4. In the Value Added Tax, tax exemptions are found in 85 cases and cost the state budget 854 million euros. A typical example of an exemption is the super-reduced rate of 6% imposed on medicines and books, as well as the exemption from VAT on postal services.

5. At the vehicle registration fee there are 25 tax exemptions that take away 121 million euros in revenue. Hospitals, those with many children, taxpayers with three children, foreign diplomatic services and owners of hybrid-electric cars are exempted from the registration fee, partially or fully.

6. 44 exemptions are recorded in the special consumption taxes, which deprive the budget of 1.1 billion euros. Discounts on energy products amount to 589.6 million euros, while the cost of ethyl alcohol and alcoholic beverages (580.4 million euros) fluctuates at similar levels. Also, the discounts on the coffee consumption tax exceed 540,000 euros.

7. In vehicle traffic taxes there are 28 exemptions that cost 11.8 million euros.

8. In stamp duty, 76 exemptions with a total cost of 73 million euros are recorded.

9. There are 19 tax exemptions in the capital accumulation tax, which cost 17 million euros.

10. In the insurance premium tax there are 5 exemptions which reduce the revenues to the state budget by 421 million euros.