ATHENS – A promise to raise salaries in line with the European Union average unfulfilled has left many Greeks caught in a vise of high taxes and high prices and finding ways to avoid paying while the rich and businesses have benefited.

The government also has had to revise a scheme of taxing free-lancers while still unable to keep some sectors – particularly professionals – from being paid only in cash to evade taxes while the salary and pensioners can’t escape.

A review of the current New Democracy administration by Kathimerini said that from 2020-23 that gross earnings have risen by 11 percent but the income tax corresponding to that has jumped 41 percent.

Tax brackets in Greece are as high as 45 percent for those earning just 40,000 euros ($44,322) a year while businesses pay only 22 percent – which was cut from 24 percent in 2021 and many rich hide their income in foreign bank accounts.

That has left public sector and private salaried workers who have deductions taken from their checks and whose income is easily verifiable left to pay most of the taxes and businesses, particularly food and beverage, not paying their due.

The government has raised the minimum wage twice but salaries have not increased as vowed although the hated solidarity tax to pay benefits for vulnerable people was abolished while social security contributions were reduced.

But those have been offset by the income taxes, the report said, and by inflation that has cut purchasing power, especially with a Value Added Tax (VAT) of up to 24 percent on many food products.

Data from the Paris-based Organisation for Economic Cooperation and Development (OECD) showed the biggest hit was for those with the average annual income of 12,554 euros ($13,911.) They paid 946 euros ($1048) in income taxes an 2,443 euros ($2706) for social security contributions

Even with the solidarity tax ended, the average income tax is now 1,334 euros ($1478) annually, which is 41 percent more than in 2020, a year after New Democracy power in ousting the Radical Left SYRIZA.

Because of some changes in the tax code, an expected 3 percent gain in earnings won’t keep up with a 7.5 percent hike in the income tax, with disposable income seeing a 2.5 percent loss due to inflation.

Since taking power in 2019, the government hasn’t updated tax brackets to account for inflation and even people in the same bracket are paying different rates because of incentive programs creating inequities.