Government to Channel Revenue from Tax Evasion Crackdown into Tax Cuts, Says Minister

08:21 28/10/2024 - Πηγή: iEfimerida

The Greek government will allocate a portion of the revenue gained from reducing tax evasion to fund further tax cuts, announced Kostis Hatzidakis, Greece’s Minister of National Economy and Finance.

This approach reflects the government’s

commitment to easing tax burdens for citizens while boosting public revenue through tighter controls on tax compliance.

“It’s a commitment of our government that some of the increased revenue from cracking down on tax evasion will go directly towards reducing taxes,” Mr. Hatzidakis told the Athens-Macedonian News Agency (AMNA). He highlighted that recent anti-evasion efforts have led to higher revenue collections without any increase in tax rates.

Revenue from VAT rose by 10.3% in the first half of this year compared to the same period last year, driven by economic growth and measures such as linking point-of-sale (POS) systems with cash registers.

“Our efforts to reduce tax evasion are showing real results, and with these gains, we can work on lowering taxes even further,” the minister said.
The ministry has outlined several tax relief measures for the coming years.
These include a further reduction in social security contributions by 0.5% in 2027, bringing the total reduction to one percentage point. Starting in 2026, the government also plans a 30% cut in presumed income thresholds, intended to benefit lower-income earners by using digital tools to more accurately assess real income.

Additional measures include eliminating the self-employment tax for freelancers and individual businesses beginning in 2025.
There are also plans to lower VAT, reducing the standard rate from 24% to 22% and the reduced rate from 13% to 11%.

On top of this, the government is considering cuts in personal income taxes, particularly for middle-income earners. A critical part of this plan is the role of the Independent Authority for Public Revenue (AADE), which is tasked with ensuring greater tax compliance over the next several years.

If his term is renewed, Director Giorgos Pitsilis will continue to lead AADE’s strategy, which includes using modern technology to identify tax non-compliance, coordinating tax and customs inspections, reorganizing control procedures, and digitalizing processes to improve accuracy and efficiency.
Government officials are optimistic that AADE’s 2025-2029 Strategic Plan will create a fairer and more efficient tax system, helping meet Greece’s financial goals and providing further tax relief to citizens.

Mr. Hatzidakis emphasized that the success of these initiatives is essential to maintaining increased public revenue and advancing the government’s tax cut agenda.

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