ATHENS – Moving swiftly to cut the corporate tax rate, the new New Democracy government which promised to help the middle class hasn’t moved to do that in a projected 2020 budget that shows that sector will keep carrying the crushing burden.
Trying to lure foreign investors, Prime Minister Kyriakos Mitsotakis’ government slashed a 29 percent corporate rate set by the former ruling Radical Left SYRIZA to 24 percent and said it would reduced yet again in 2020 to 20 percent.
But the budget for next year shows that those earning more than 1,000 euros ($1114.12) will see reductions of just 1.5-2 percent, leaving open the question of whether they are in effect also subsidizing the corporate cuts.
Overall some 1.34 million taxpayers, mostly wage earners or pensioners, declared an annual income of between 16,000-50,000 euros ($17,826-$55,706) in 2018 said Kathimerini in a report. They make up only 15 percent of the total number of taxpayers, but paid 4.4 billion euros ($4.9 billion) to the tax office, or 53 percent of the total income tax on individuals.
Of the 1.2 billion euros ($1.34 billion) earmarked for benefits in the budget, only 281 million euros is seen going toward tax reductions for employees and pensioners. And of that 281 million euros ($313.07 million,) more than 150 million euros ($167.12 million) will be used to relieve those receiving an income of up to 1,000 euros ($1114.12) a month. The rest will be allocated to taxpayers in the 16,000-50,000-euro bracket with the new tax scale set to start the end of November so far.
The Finance Ministry said there will be a 9 percent tax for those with incomes up to 10,000 euros ($11,141.15) monthly and a reduction of the tax deduction from 1,900-2,100 to 777-1,340 euros.
A total of 8.9 million individuals file tax returns in Greece, which come to a total of around 73 billion euros ($81.33 billion) and wages and pensions account for 83 percent of total income, but declared incomes from dividends and businesses have fallen sharply because of overtaxation that has ramped up tax cheating.
That leaves it to salaried workers and pensioners who are being called upon to shoulder the country’s tax burden. The total income tax on individuals amounts to 8.3 billion euros ($9.25 billion.)