February 5, 2023

Athens News

News in English from Greece

Income in 2023: salary and pension increases, tax cuts, and who it concerns

A number of innovations, which, according to the Ministry of Finance, will help to partially strengthen the income of the population and mitigate the consequences of high inflation, the government intends to implement from the beginning of the year.

According to APE-MPE, the package of measures under consideration is both permanent and emergency, and their total amount is 4.2 billion euros. These include abolishment as well as tax cuts, wage and pension increases, benefits, special benefits, etc.

Civil servants will be the first to receive a salary increase from the first month of the new year, due to the abolition of the solidarity contribution and the special contribution of 1% in favor of the Welfare Fund (Ταμείου Πρόνοιας). In addition, pensioners will see on their accounts an increased amount they receive. An increase in the income of doctors of the National Health Service and the General Staff of the Armed Forces is also expected.

In addition to a direct increase in wages, indirect strengthening of incomes is also envisaged, by reducing or freezing taxes. In particular, support for the real estate market continues through the “freezing” of VAT on construction, capital gains tax and the extension of the “bonus” for real estate renovation for another two years, as well as the reduction in VAT rates for cafes, restaurants, transport are extended until the end of June 2023 .

In particular, the package of measures for 2023 includes:

  • Solidarity levy (Εισφορά αλληλεγγύης): permanent abolition for all taxpayers. Thus, after the employees of the private sector, civil servants and pensioners are next in line, whose amounts they receive will increase from the first month of the new year. The annual allowance for taxpayers (with an income of more than 12,000 euros) starts at 22 euros and can exceed 676 euros for those with higher incomes. For example, for a civil servant with an annual income of 18,000 euros, the benefit will be about 132 euros per year.
  • Insurance premiums: a permanent reduction of three percentage points for private sector workers.
  • Pensions: increase in income of pensioners of all funds by 7.75%. The measure concerns 94.6% of senior citizens.
  • Preservation of preferential VAT rates until June 2023 on passenger transport services, soft drinks and their distribution services, cinema, theater and concert tickets, gyms and dance schools, as well as travel packages.
  • Suspension of VAT for new buildings until the end of 2024.
  • Withholding tax bonus for home renovations and refurbishments.
  • Suspension of 15% capital gains tax on property sales until the end of 2024.
  • Subsidizing the installation of photovoltaic panels in households, businesses and farms to save energy.
  • The Renovate/Save and Renovate/Rent programs, which provide subsidies for repairs and energy savings in homes, as well as a soft loan program for the purchase of a first home by young people and couples up to 39 years old.
  • Extension of the maternity allowance in the private sector from 6 to 9 months to address the problem of low fertility (budget – 64 million euros).
  • Increased housing allowance to support students studying away from home.
  • Reform of the calculation of the special salary of doctors of the National Health Service.
  • Raising the salaries of the leadership of the armed forces.
  • Raising the minimum wage from May 2023.

Source link