Prime Minister Kyriakos Mitsotakis announced on Wednesday that the so-called “solidarity levy”, an additional tax on income, will be abolished from January 2023, and that pensions frozen since 2010 will be allowed to “grow up a bit” again.
“This is a double bang that the growth of the country should benefit everyone without compromising the fiscal balance and competitiveness of the Greek economy,” Mitsotakis told lawmakers during a parliamentary debate called by the prime minister to present his government’s work on social issues. .
He said that pensions “will be put on a course of regular and permanent increases” from 2023, and that the abolition of the solidarity tax will affect everyone – private and public sector workers, as well as pensioners.
The solidarity levy was introduced under the provisions of the first financial aid in 2010, initially as a “temporary fiscal measure”, to which even pensioners with a minimum pension fell victim.
This measure was changed in the past and eventually applied to annual income starting at €12,001. The fee was calculated on several percentage income categories, but there was a limit whereby persons with an annual income between 50,000 and 60,000 euros would pay the same fee as persons with an income of more than 100,000–200,000 euros.
Two years ago, it was abolished for private sector workers, but retained for the public sector.
Prime Minister Mitsotakis originally promised to lift the levy for one year (2021) in September 2020, as part of a tax relief package to boost jobs amid the recession caused by the coronavirus pandemic, but that plan was shelved due to the economic downturn.
According to the state broadcaster ERT, the solidarity fund raises 460 million euros a year.