ATHENS – Big hikes in social security contributions and tax hikes – including prepaid – have forced 111,212 self-employed professionals in Greece to turn in their invoice books for services, putting them either out of work or hiding their income to get around the avalanche of fees imposed by the ruling Radical Left SYRIZA-led coalition.
It was the work of former minister Giorgos Katrougalos, infamously now called the Katrougalos Law, and another in a series of anti-austerity broken promises by a government which promised to cut taxes but drove them up to appease international creditors in return for more bailout monies.
Finance Ministry data show that 40 percent in freelancers have been forced out of business by excessive social security contributions combined with changes to income tax and the solidarity levy which would have made them turn over up to 50 percent of their income to the state.
Only around 170,000 so-called Blokakia, the invoice books, are in effect now from 280,000 before the law was changed, the newspaper Kathimerini said, adding that more freelancers appear to be lining up to close their books out this year as well.
Some of those who no longer use invoice books were said to be trying to find ways to make money while others have opened Private Capital Companies (PCs) so as to avoid the huge contributions, which included paying taxes a year in advance before getting any income and without knowing how much they would get.
Accountants say there are cases of freelance professionals who were forced by the tough measures to pay taxes and social security contributions that amounted to as much as 80 percent of their income, the paper said.
In the first 11 months of the year, 48,787 self-employed have walked away from the system and professional associations say more coming SYRIZA taxes and schemes will drive others out of business too and increase tax evasion the government vowed to reduce.