This year, tax cuts that support income

By Tasos Dasopoulos

Revenue support with interventions of about 3 billion euros and modernization of the structures of the economy includes the package that has already been implemented for the economy since January 1, despite the uncertainty created by the double crisis pandemic and price increases in energy products.

In a statement to Capital.gr, the head of the Finance Office of the Prime Minister Mr. Alexis Patelis, describing the plan behind the interventions for 2022, emphasizes that “the government, regardless of the policy of dealing with the emergency effects of the pandemic on businesses and households, “This is a series of interventions that improve incomes and address a number of structural problems. The goal is to sustainably grow the economy for the benefit of all and to create many well-paying jobs.”

In particular, the package of interventions to support income and employment that are already implemented includes:

1. The increase of the minimum wage from the beginning of the year by 2%, with prospect and second increase before the end of the year. It is clear that the measure is aimed at boosting incomes, especially for the low paid.

2. The repetition for 2022, of the extraordinary measure of the suspension of the special solidarity contribution for the private sector. The measure has a direct benefit of 49 to 2771 euros for employees depending on income and a cost to the budget of about 800 million euros.

3. The repetition of the extraordinary measure of reduction of insurance contributions, which has a profit of 108 to 540 euros per employee and a cost to the budget of 850 million euros.

4. The reduction, on a permanent basis, of the tax advance for legal entities from 100% to 80% and for those doing business from 100% to 55%.

5. The extension until the end of June, of the low VAT rates for tourism, coffee and non-alcoholic beverages served, transport, gyms and cinema and theater tickets, at a cost of € 205 million, which is reaped by these sectors.

6. The reduction to 10% of the mobile subscriber fee from 12% to 20% where it ranged until last year for all over 29 years old.

7. 30% of the expenditure incurred by electronic means of payment to specific professions, who are charged with high tax evasion, will be deducted from taxable income up to the amount of 5,000 euros per year. The measure has a tax profit that will start from 450 euros for incomes up to 10,000 euros and will reach up to 2,200 euros per year for incomes over 40,000 euros.

Support for young people

There are four specially adapted measures specifically for young people. Specifically:

– It is applied from 1/1/2022 the reform of auxiliary insurance for new entrants to the labor market. Newcomers to the job market for the first time as employees acquire an “individual piggy bank” and will now have significant control over their pension and final amount.

– The program for the “first stamp” to facilitate employment growth. Specifically, all young people from 18 to 29 years old who have no previous work experience and will be hired within the year 2022, receive a total amount of 1,200 euros for the first six months of employment.

– The mobile subscriber fee is abolished, for young people up to 29 years old.

– Excise duty on diesel is refunded, to young farmers and members of cooperatives of the year 2022.

Transformation of the economy

In the field of economic transformation, a pioneering measure is coming especially for small and medium enterprises. Specifically, incentives are provided for mergers and acquisitions of medium, small and very small enterprises, including the deduction on income tax, by 30% for five years, while from October 1, 2021, the tax on capital accumulation has been reduced by 50%.

The measure aims to increase the size of small and medium-sized enterprises in order to form a “banking profile” and to solve the -accurate today- financing problem and at the same time to have the size and infrastructure to take advantage of economies of scale. The companies that will enter the program will also have access to the low-interest financing of the Recovery Fund.