Filenews 22 April 2021
Five tax and insurance reliefs for workers and businesses announced by Prime Minister Kyriakos Mitsotakis during a teleconference meeting on restarting the Greek economy.
These are measures – "catalysts" for economic growth and attracting new investment, finance minister Christos Staikouras said.
In particular, these are the following measures.
1. From this year, on a permanent basis, for all natural persons doing business, the tax advance is reduced from 100% to 55%. Thus, the increases in the tax advance imposed by the previous Government are overturned.
2. The tax advance shall be reduced, on a permanent basis, for legal persons and entities from 100% to 80% from 2022. Especially for this year, this is reduced even further, to 70%.
3. From 2022 (tax year 2021) the tax rate for all legal persons and entities is reduced from 24% to 22%, i.e. well below those received by the current Government, which was at 28%. It is recalled that last year saw a large reduction in the import tax rate for natural persons doing business, from 22% to 9%.
4. The three percentage point reduction in the insurance contributions of private sector employees is extended to 2022.
5. The suspension of a special solidarity contribution to the private sector is extended to 2022.
Examples
* A business-legal person who will show for the first time 10,000 euros in profits in the fiscal year 2021, would pay in 2022 a tax of 24% and an additional tax advance of 24%, i.e. a total charge of 48% or 4,800 euros.
Under the new arrangement he will pay 22% tax and a tax advance of 17.6% (22%*80%), i.e. a total charge of 39.6% or 3,960 euros.
The benefit to the company therefore amounts to EUR 840.
* A natural person who carries on business and shows for the first time a net income of 10.000 euros, would pay a tax of 900 euros (9%) and a tax advance of another EUR 900 (9%), i.e. a total of EUR 1,800.
Under the new arrangement he will pay a tax of 900 euros (9%) and a tax advance of EUR 495 (9%*55%), a total of EUR 1,395.
The cost for 2021
The budgetary cost of the first three measures, agreed with the institutions, amounts to around EUR 900 million. Eur 200 million for 2021 and is estimated at around EUR 200 million. However, this amount is expected to be offset by an improvement in the economic recovery prospects.
The budgetary cost of the last two measures is around EUR 1.6 billion. In 2022, the total amount of the aid was EUR 1 million.
Detailed what the Prime Minister announced
"The government has demonstrated that its constant priority is to reduce taxation before, during the pandemic, but also after it. Our first concern after the fight against the health crisis is the rapid recovery of the economy and to this end we are today announcing five measures which will form the basis, the foundation, for a decisive return. And they will enable companies that have suffered losses in the pandemic to be able to return to a positive sign.
At the same time, they are measures that will provide liquidity to the economy, but will also significantly increase the prospects of a dynamic recovery and attract investment.
More specifically:
From this year - but now on a permanent basis - for all natural persons doing business, the tax advance is reduced from 100% to 55%. This reverses the tax advance increases imposed by the previous government.
Secondly. The tax advance is reduced - again on a permanent basis - for legal persons and legal entities from 100% to 80% from '22. Especially for this year, however, it is reduced even further, to 70%.
Thirdly. The tax rate of all legal persons and entities from 24% to 22% is reduced on a permanent basis from 2022, i.e. for the tax year of '21. That is to say, at levels well below what the current government received, which I recall was 28%. I would remind you that last year saw a large reduction in the import tax rate for natural persons doing business, from 22% to 9%.
Fourthly. The 3 percentage point reduction in the insurance contributions of private sector employees is extended to 2022.
Fifthly, the suspension of the special solidarity levy in the private sector for the year 2022 is being extended - we can now confirm this officially."
The teleconference was attended by the Minister of Finance Christos Staikouras, the Minister of Development and Investment Adonis Georgiadis, the Minister of Labour and Social Affairs Kostis Hatzidakis, the Minister of State George Gerapetritis, the Deputy Minister of Finance Theodoros Skylakakis, the Deputy Minister of Development and Investment Nikos Papathanasis, the Deputy Minister of Development Giannis Tsakiris, the Deputy Minister of Labour Panagiotis Tsakloglou, the Deputy Prime Minister to the Minister of State Thodoris Livanios , the Deputy Prime Minister responsible for the Coordination of the Government Project Akis Skertsos, the Secretary General of Economic Policy Christos Triantopoulos, the Secretary General of Financial Policy Athanasios Petralias, the Secretary General of Public Investments and ESPA, Dimitris Sculkos and the Head of the Economic Office of the Prime Minister, Alexis Patelis.
5 meters - "bridge"
For his part, Finance Minister Christos Staikouras said:
"Since the beginning of its term of office, the Government has set as one of its main priorities in the economic field the reductions in taxes and insurance contributions to natural and legal persons.
Reductions that contribute to strengthening the productivity and competitiveness of the Greek economy, increasing the disposable income of households and businesses and stimulating social cohesion, being a key factor in achieving high, sustainable and inclusive rates of economic growth.
Thus, before the start of the health crisis, we implemented a series of permanent reductions in taxes and insurance contributions, and even in the throes of the pandemic we continued this policy, as far as possible, by proceeding with significant, additional, temporary reductions.
At the same time, we have committed ourselves that once the "storm" of coronovirus is over, we will return to the correct fiscal policy of permanent tax reductions and insurance contributions, by permanently making some of the temporary reductions or implementing others.
Today, in view of the need to stimulate the restart and the fastest possible recovery of the economy, but also with a view to the day after the health crisis, we are making this commitment a reality.
We are proceeding with the implementation of 5 meters – "bridge" to the post-coronavirus era, through which we provide, additional, significant support to households and businesses, so that they can regroup after the pandemic test and to increase their liquidity."
Source: Capital.gr
