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Economy

Greece Announces Five Measures Lowering Taxes, Social Security Contributions

ATHENS — Prime Minister Kyriakos Mitsotakis on Thursday announced five measures to lower taxes and social security contributions for workers and businesses, during an online government meeting focusing on kickstarting the Greek economy.

"The government has proved that its enduring priority is the reduction of taxation before and during the pandemic but also after it. Our primary concern after fighting the health crisis is the rapid recovery of the economy and for this reason we are today announcing five measures that will act as the basis, the foundation, for a decisive recovery," Mitsotakis said.

He said the measures will allow companies that sustained losses during the pandemic to return to profitability and will also pump liquidity into the economy, as well as greatly increasing the prospects for a dynamic recovery and for attracting investments.

Among the planned measures is the permanent reduction from this year of the tax advance paid by individual entrepreneurs, from 100 pct to 55 pct, reversing the tax hikes imposed by the previous government. Also reduced is the tax advance for legal entities, from 100 pct to 70 pct in 2021 and then permanently to 80 percent from 2022.

He also announced a lowering of business tax rates to 22 pct, the reduction of social insurance contributions of private-sector employees by 3 percentage points in 2022 and an extension of the suspension of the special solidarity tax in the private sector to 2022.

Greek FinMin presents five cuts in taxes, social insurance for workers and enterprises

Greek Finance Minister Christos Staikouras on Thursday presented in detail the five measures announced by Prime Minister Kyriakos Mitsotakis for tax cuts and lower social insurance contributions, designed to offer a significant support to Greek households and enterprises.

In a statement, Staikouras said the measures included the reduction, on a permanent basis, of the tax advance payment from 100 pct to 55 pct for all self-employed people, the reduction of tax advance payment of corporations from 100 pct to 70 pct this year and to 80 pct in 2022 and the reduction of a corporate tax from 24 pct to 22 pct from 2022. Also, the extension of a reduction on social insurance contributions for wage workers in the private sector by three percentage points in 2022 and an extension of a suspension of a special solidarity levy in the private sector in 2022.

The FinMin said: "The fiscal cost of the three first measures, which have been agreed with the institutions, totals around 900 million euros for 2021 and around 200 million euros annually for the next years, a sum which is expected to be offset by improving economic recovery prospects. The fiscal cost of the last two measures will be around 1.6 billion euros in 2022".

Staikouras noted that the government has made one of its priorities in the economic field to cut taxes and social insurance contributions for individuals and companies. He said that these reductions will help to boost productivity and the competitiveness of the Greek economy, raising available income for households and enterprises and strengthening social cohesion – a key factor to achieve high and sustainable economic growth rates, without exclusions.

He stressed that these five measures were a bridge in the road towards the post-pandemic era and to help households and enterprises to regroup after the ordeal of the coronavirus pandemic and to boost their liquidity. At the same time, these measures will help to attract new investments, he said.

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