Abu dhabi: Greek Prime Minister Kyriakos Mitsotakis announced a significant £1.6 billion (US$1.9 billion) reform of Greece's income tax system, aimed at supporting the nation's middle class, which continues to face economic challenges from past crises.
According to Emirates News Agency, the announcement was made during Mitsotakis's annual policy speech, where he outlined his government's priorities for the upcoming year. The reform includes income tax cuts, with a particular focus on families with children. Families with four or more children will be exempt from income tax on the first £20,000 of their annual income, a move intended to encourage higher birth rates in Greece.
The prime minister also revealed additional benefits for pensioners, improved wages for security-force employees and diplomats, and other tax reductions initially introduced during Greece's prolonged debt crisis. These measures aim to alleviate the financial strain on citizens affected by rising living costs and stagnant wages.
Mitsotakis emphasized that the primary goal of the tax reform is to address the issue of high prices, stating, "I know very well that high prices are the biggest problem." He assured that all proposed changes have been carefully calculated and are in compliance with European obligations.
The newly announced measures include reductions in income tax rates, tax exemptions for families with multiple children, lower tax rates for incomes between £40,000 and £60,000, and tax exemptions for workers under 25 earning up to £20,000. Additionally, income from rental properties will be subject to a reduced tax rate.
Residents of small villages with populations not exceeding 1,500 will benefit from a halved property tax in 2026, with complete exemption starting in 2027. Furthermore, a 30 percent reduction in value-added tax is set for distant islands with fewer than 20,000 residents.