Middle Class: Three scenarios to reduce taxes, evidence and insurance contributions

The decision to allocate any fiscal space in 2025 to reduce direct taxes has already been taken.

The focus is on the middle class with changes to the tax scale that will « breathe » to incomes reaching or even exceeding 40,000 euros a year.

The government's targeting in the middle class is a central strategic choice, as the next elections are considered to be judged there.

The Minister of National Economy and Finance, Kostis Hatzidakis, is more and more often said that « this year will be a year with significant further tax cuts for the middle class », referring to relevant announcements by the Prime Minister at TIF next September.

According to Kostis Hatzidakis, « unless there is an unpredictable, uncontrolled international crisis, continuing the effort to tackle tax evasion (with digital shipping and tariffs, POSs, etc.) will allow us to reduce immediate taxes.

We insist on direct taxes because we consider that the reductions in them are not encouraged by some intermediates, as is the case with indirect ones, but go straight to the pocket of taxpayers. « 

Tax -scale scenarios will begin to enter the table of consultations when there are well -founded estimates for the available fiscal space.

This is calculated in mid -summer, so that there is a clear picture of the process of executing the budget and the additional revenue from tax evasion, which in 2024 amounted to 2 billion euros, but also a first approval of the European Commission, which has a reason to implement the new taxation agreement.

It is recalled that, under the new rules of the Stability Pact, any surplus of revenue cannot be used to finance support measures, with the exception of permanent extra proceeds from tax evasion and after the approval of the Commission.

Much will also be judged by developments in European negotiations on the escape clause for defense spending.

In any case, the goal is to favor the middle incomes, which do not have secured increases such as the lowest due to the adjustment of the minimum wage, while on the other hand, there are the highest pressures due to the non -price tax adjustment of the tax scale.

At the table of discussions that will exist and with social actors will find scenarios for changes in the tax scale they provide for:

Reduce the rate in the step of 10,001 to 20,000 euros, which currently amounts to 22%. If, for example, this rate was reduced to 15%, it would mean a reduction in the scale tax from € 2,200 to 1,500 euros, leading to an indirect increase in salary by 50 euros per month for private employees with 14 salaries.

Tax scale pricing with the aim of relieving taxpayers with income between 20,000 and 40,000 euros.

In recent years inflation and non -price taxation have burdened the employees.

While they saw an increase in their registered salary, their actual income was reduced as they were charged with higher taxes due to non -adjustment of tax scales.

The increase in income has led taxpayers to a higher tax step, without it being accompanied by substantial tax changes to their benefit.

It is noted that interventions made in 2020 on the tax scale mainly favored freelancers and self -employed as the implementation of the 9% rate for the first 10,000 euros in their income had an annual benefit of 1,300 euros, while for incomes of 20,000 to 50,000 euros the relief was only 17 euros.

Increase in income above which the highest tax rate will apply.

Today the top tax rate of 44% is imposed on the part of the income exceeding 40,000 euros.

The highest rate (44%) may not be one of the highest in Europe, but it is activated from very low levels at least proportional to the average salary.

The new taxation cycle will include haircut by 30% of living evidence from 2026 and gradually abolished them in the coming years, with the aim of reducing distortions and more fairer distribution of tax burdens.

Evidence shows that most taxpayers trapped in the trap of living documents are employed and low -income retirees who are called upon to pay extra tax in relation to their actual income, based on dwellers, cars, etc.

The changes to the evidence will be based on the proposals of the relevant Committee of the Ministry of Finance, which provide for:

Reduction of medical records by 30%.

Improve their calculation and correction of injustices in minimal amounts.

Review of the framework to propose solutions for aspects that are considered anachronistic, such as cars, which are still calculated on the basis of cubism, and now their value and power are based on different criteria.

There is also a scenario for a new reduction in insurance contributions by 0.5% in 2026. Although the reduction has been announced for January 1, 2027, it may be applied earlier if tax revenue allows it, from January 1, 2026.