“We want to cut taxes further, not because we want to please, but because we can. Already in 2025 we are proceeding with 12 tax reductions. In 2026 and 2027 we can proceed with further reductions, for two reasons: because Greece, according to the estimates of all international organizations, will have higher growth than the EU average and because the effort to reduce tax evasion continues. Because of the development policy and the tax evasion policy, all those who pay their taxes untouchably will see a lower burden.”
This was pointed out by the Minister of National Economy and Finance, Kostis Hatzidakis, speaking yesterday Thursday at the annual Tax Forum organized by the Hellenic-American Chamber. The minister also highlighted Eurostat data according to which in 2023 Greece had the largest tax reduction in terms of GDP among EU countries, from 42.8% in 2022 to 40.7% in 2023. “Despite the fact that the initiatives to tackle tax evasion are progressing which lead to more revenue, the growth of the economy and the 60 tax reductions that the government has implemented in the last 5 years have led to a reduction in the percentage of taxes in terms of GDP”, said the minister.
He also announced that the bill implementing the initiatives announced for 2025 (among other things, exemption from income tax for closed properties offered for rent, further reduction of social security contributions by one unit, incentives for mergers and innovation) is expected to be put up for consultation next week.
Referring to the initiatives to combat tax evasion, Mr. Hatzidakis emphasized that for the first time the average employee pays somewhat less taxes than the average freelancer. “We are not naive, we knew there would be reactions. But it is inconceivable to me that the boss at a job should pay less tax than his minimum wage employee. The change that was made brought in revenue in the nature of justice. And those who challenged the system were a few hundred, meaning that the ‘holy rage’ was disproportionate to the appeals that were made,” he pointed out. He also noted the implementation of the interconnection of cash registers with POS, which, despite analysts’ forecasts, not only happened but also exceeded the goals that had been set in the context of the Recovery Fund. “This has contributed to having in the first half of 2024 10.3% more VAT revenue than in 2023, with inflation of 3%. The remaining 7.3% comes from development and tackling tax evasion. We have chosen the difficult but right path and that is why we are getting results,” he said. “Since 2019, a concerted effort has been made by the governments of New Democracy and Kyriakos Mitsotakis to deal with tax evasion, which has not been the same in recent decades.”
Answering a related question, Mr. Hatzidakis referred to the improvement of important quality indicators in the economy, such as:
– The increase in exports that reached 98 billion in 2023, i.e. it was 43% of GDP. In 2008 it was 54 billion. or 22.8% of GDP.
– The qualitative differentiation of exports as the share of goods in the period 2020-2022 exceeded that of services for the first time, while in 2023 the ratio was approximately 50-50. “We are no longer talking only about shipping and tourism,” the minister said.
-The increase in the share of high-tech exports in total goods exports.
-Increasing the participation of industry in GDP by 2 units in the last 5 years, “despite urban myths that industry is in crisis”.
-The increase in the volume of investments which in the last five years was the largest in the entire EU. Investments in the period 2019-2023 increased at constant prices by 53.4% and especially in 2023 they increased at a rate of 6.6%, essentially at the level provided for in the budget.
“We are not celebrating, nor is the effort over, but these are all important achievements that we should not underestimate. We have every right to be proud of what we have achieved together. As we are proud when an athlete or a scientist succeeds internationally, we must be happy for our collective achievements as well”, concluded Mr. Hatzidakis.
Source: RES-MPE
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**Interview with Kostis Hatzidakis, Minister of National Economy and Finance**
**Interviewer:** Thank you for joining us today, Minister Hatzidakis. Let’s dive right in—can you elaborate on the key reasons behind the planned tax cuts for 2025, 2026, and 2027?
**Minister Hatzidakis:** Thank you for having me. Our approach to tax cuts is not merely a populist move; it’s a reflection of our capability. Greece is positioned to experience higher economic growth than the EU average. Coupled with our ongoing efforts to combat tax evasion, this creates a unique chance to lower the tax burden meaningfully for those who consistently fulfill their obligations.
**Interviewer:** You mentioned 12 tax reductions set for 2025. Can you share what some of these will entail?
**Minister Hatzidakis:** Certainly. Among the initiatives, we plan to exempt income tax for closed properties offered for rent, and we will further reduce social security contributions. Additionally, we are focusing on providing incentives to encourage mergers and innovation in our economy. A draft bill outlining these details will be available for public consultation soon.
**Interviewer:** Your recent comments suggest a major shift in tax equity. How do you believe these changes will affect different sectors of society?
**Minister Hatzidakis:** For the first time, we are seeing a scenario where the average employee pays less in taxes compared to the average freelancer. This realignment is crucial; it’s simply unjust for a business owner to pay a lower tax rate than their employee earning the minimum wage. The feedback we’ve received indicates that our changes have generated a sense of fairness, and while some may react negatively, their numbers are minimal compared to the broader population benefiting from these reforms.
**Interviewer:** The data you shared regarding Greece’s tax rates versus GDP is impressive. How has the government ensured that initiatives to tackle tax evasion are effective?
**Minister Hatzidakis:** Our efforts in the interconnection of cash registers with POS systems have surpassed expectations and goals set in the Recovery Fund framework. This has translated into a significant increase in VAT revenue, which shows that as we grow our economy, we also enhance our tax collection efficiency. This dual approach—combining growth with strict enforcement—promises a sustainable financial future for Greece.
**Interviewer:** Lastly, looking forward to the implementation of these tax cuts, what would you say to the citizens of Greece who might be cautious about such changes?
**Minister Hatzidakis:** I’d reassure them that these reforms are grounded in substantial economic analysis and successful revenue generation strategies. We are pursuing a transformative path that prioritizes fairness and sustainable growth. With their support and continuous compliance, we can create an even more prosperous environment for all.
**Interviewer:** Thank you, Minister Hatzidakis, for sharing these insights with us today.
**Minister Hatzidakis:** Thank you for having me. It’s been a pleasure.
