Hatzidakis: Tax cuts by 2027 with growth and tackling tax evasion

“We want to further reduce taxes, not because we want to be pleasant, but because we can do it. Already in 2025, we are moving forward with 12 tax reductions. In 2026 and 2027, we can implement further reductions for two reasons: because Greece, according to estimates from all international organizations, will have higher growth than the EU average, and because the effort to reduce tax evasion continues. Due to our developmental policies and tax evasion strategies, everyone who pays their taxes willingly will see a lower burden.”

This was emphasized by the Minister of National Economy and Finance, Kostis Hatzidakis, speaking yesterday, Thursday, at the annual Tax Forum organized by the Hellenic-American Chamber of Commerce. The minister also highlighted Eurostat data indicating that in 2023, Greece had the largest tax reduction relative to GDP among EU countries, from 42.8% in 2022 to 40.7% in 2023. “Despite the ongoing initiatives to combat tax evasion, which lead to increased revenues, the growth of the economy and the 60 tax reductions implemented by the government in the last five years have resulted in a decrease in the tax-to-GDP ratio,” noted the minister.

He also announced that the bill implementing the initiatives announced for 2025 (including exemption from income tax for closed properties offered for rent, further reduction of social security contributions by one percentage point, and incentives for mergers and innovation) is expected to be put out for consultation next week.

Referring to initiatives to combat tax evasion, Mr. Hatzidakis stressed that for the first time, the average employee pays slightly less in taxes than the average self-employed person. “We are not naive; we knew there would be reactions. But it is unreasonable for me for a boss in a job to pay less tax than their employee who is earning the minimum wage. The change that was made brought in revenue with a sense of fairness. And those who challenged the system were just a few hundred, which means that the ‘holy anger’ was disproportionate to the appeals that were made,” he stated. He also noted the implementation of connecting cash registers to POS systems, which, contrary to analysts’ predictions, not only happened but exceeded the targets set under the Recovery Fund. “This has contributed to having 10.3% more VAT revenue in the first half of 2024 compared to 2023, with inflation at 3%. The remaining 7.3% comes from growth and the fight against tax evasion. We have chosen the difficult but correct path, and that is why we have results,” he said. “Since the governments of New Democracy and Kyriakos Mitsotakis took office in 2019, there has been a coordinated effort to combat tax evasion that has not been seen in decades.”

In response to a related question, Mr. Hatzidakis referred to improvements in significant qualitative indicators in the economy, such as:

– The increase in exports, which reached 98 billion in 2023, accounting for 43% of GDP. In 2008, exports were 54 billion or 22.8% of GDP.

– The qualitative diversification of exports, as the share of goods from 2020 to 2022 surpassed that of services for the first time, while in 2023, the ratio was about 50-50. “We are no longer talking only about shipping and tourism,” said the minister.

– The increase in the share of high-tech exports in total goods exports.

– The increase in the industry’s contribution to GDP by 2 percentage points over the last five years, “despite urban myths that the industry is in crisis.”

– The increase in the volume of investments, which in the last five years was the highest in the entire EU. Investments from 2019 to 2023 increased by 53.4% in constant prices, and specifically in 2023, they increased at a rate of 6.6%, essentially at the level projected in the budget.

“We are not celebrating, nor has the effort concluded, but all these are significant achievements that we should not underestimate. We have every right to be proud of what we have all achieved together. Just as we are proud when an athlete or a scientist succeeds internationally, we should also be happy for our collective achievements,” concluded Mr. Hatzidakis.

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