Greek Premier offers €1.6 billion tax cuts to spur middle class

Greek Prime Minister Kyriakos Mitsotakis announced on Saturday a radical €1.6 billion (US$1.9 billion) reform of the country’s income tax system, aimed at boosting the nation’s middle class that has struggled to rebound from years of crisis.

In an annual speech setting out his government’s policy priorities for the coming year, Mitsotakis unveiled cuts in income tax rates, particularly for families with children. He announced no income taxes for families who have four or more children on the first €20,000 of annual income, in a bid to boost Greece’s low birth rates.

He also announced extra benefits for pensioners, better wages for security-force employees and diplomats, and other tax cuts first introduced during Greece’s decade-long debt crisis.

The plans are designed to offer relief for citizens burdened by a rising cost of living and still-suppressed real wages.

“I know very well that high prices are the biggest problem,” and the tax reform is designed to address that, Mitsotakis said, speaking at the Thessaloniki International Fair.

All the changes announced have been fully measured and “comply with our European obligations,” the premier said.

The measures announced on Saturday include: cuts in income tax rates and an exemption for families with four or more children; a lower tax rate for incomes between €40,000 and €60,000; a tax exemption for workers under 25 earning up to €20,000; and a lower tax rate for income from rental properties.

Greeks in villages with no more than 1,500 residents will pay half of the property tax in 2026 and none from 2027 onwards. Value-added tax in distant islands with fewer than 20,000 citizens is being reduced by 30 per cent.

WAM