Following the recent victory in the countries general election, the New Democratic Government in Greece will bring forward legislation for a wide range of tax cuts in attempts to boost the economy after several years of poor financing and increasing national debt. Incoming Prime Minister Kyriakos Mitsotakis is inheriting a crippled economy saddled with taxes which have been frivolously introduced over the last decade, however he has announced his first step in his attempts to save the economy.
The first, and most significant, change announced is a substantial reduction in corporate tax and also value-added tax (VAT). Planned to be phased in over two years, the corporate tax rate will be reduced from 28% to 20% for Greek businesses.
Whilst the official percentage that VAT will be reduced by is yet to be announced, Mitsotakis promised in his campaign for office that VAT will be cut to 22% from the current 24% standard rate, and a reduced rate of 11% from the current 13%.
Among others, The New Democratic Party’s tax program includes:
- A reduction in withholding tax on dividends from 10% to 5%;
- A lowering of social security contributions;
- A VAT exemption on construction services for a three-year period;
- A 30% reduction in the unified property tax known as ENFIA for all property owners;
- A reduction in the lowest income tax bracket from 22% to 9% when income is below €10,000;
- A cut to the highest income tax rate, which is currently 45%.