Extra money from the anti-avoidance measures is flowing into state coffers and the government estimates that €606m will be added to revenue. The new self-employed taxation system brings in 874 million euros in revenue, while the final amount after the abolition of the professional tax will be in the order of 606 million euros per year.
This amount, according to the government and executives, will be allocated to society, either through benefits – to those who need it – and, as the financial staff reports, will be directed towards Education and Health.
Their final direction is expected to be written into the state budget and final plan for 2024, which will be updated in November and voted on near Christmas. The plan is expected to have some changes and there will be revisions, in terms of revenue, but also possibly alternative scenarios in terms of inflation in 2024, due to developments in the Middle East. The Prime Minister pledged that the money from the detection of tax evasion will be returned to society, which means that the positive interventions for many will come from the money of tax evaders.
How many and which freelancers are burdened by the changes in taxation [παραδείγματα]
According to the Minister of National Economy and Finance, Kostis Hatzidakis, who presented the bill on Tuesday, from 2024 freelancers and the self-employed will have a reference point for their presumptive income and the amount of the presumption is 10,920 euros. The pretension fee is reduced from next year by 50% for those who declare income above the presumption and by 25% for those who declare below the limit of 10,920 euros.
The vast majority of self-employed people will pay between zero and €3,000 in tax. “New Democracy does not want tax rates to increase. However, we are not talking about this, but about combating tax evasion”, said Kostis Hatzidakis. According to the minister, “no freelancer will be allowed to be taxed for an income lower than that of an employee who is paid the minimum wage and added that this presumption will be rebuttable.”
For those who declare real incomes higher than the minimum wage, a 50% reduction in the pretense fee will be applied immediately from 2024. While those who declare incomes lower than the minimum wage, they will have a 25% reduction in the pretense fee. The application fee will be abolished in two years.
According to the data for a total of 735,320 freelancers, the average increase in the burden is 1,444 euros for 473 thousand taxpayers.
-The 138,000 will have a reduction in the tax burden by 560 euros on average each.
-The 124,000 will have no charge or relief.
-The 473,000 will pay more tax, on average +1,444 euros each.
The State currently collects 1.709 billion from the taxation of the self-employed. euros (1.331 billion from the income tax and 378 million from the business tax). With the implementation of the new system, it is predicted that revenues will increase by 874 million euros, while if the abolition of the pretense fee is taken into account, revenues will increase by 606 million euros.
Finally in cases where the professional has an income lower than an employee
The new system has as its reference point the minimum wage, considering that a self-employed person cannot have an income lower than an employee paid the minimum wages, while it provides for a more favorable status for young professionals for the first five years of their activity, the the disabled, the inhabitants of small islands and settlements. According to official figures today, 71% of self-employed people declare an income below the minimum wage, while 4% pay 50% of taxes from this category of taxpayers.
Taking the floor, Deputy Minister Haris Theocharis stated, among other things, that the allowances are expected to be adjusted by over 100 million euros. Child and housing benefits will be cut, as will the guaranteed minimum income. The birth allowance, however, is not expected to be affected.
The benefit to the budget will be directed back to these benefits, either by expanding the beneficiaries or by changing the criteria. The commander of AADE, Giorgos Pitsilis, noted that the bill has three main directions: The expansion of digital tools, the strengthening of transparency and cooperation with citizens and businesses.
Inflation forecasts are up in the air
Inflation is uncertain whether the state budget target for 2024 will be reached. The government estimates it will fall to 2.4% in 2024 from 4% this year.
This estimate was made before the war in Israel with the assumption that the price of a barrel of crude oil will remain at 80 dollars, of natural gas at 40 euros per MWh and the exchange rate of the euro at 1.1 to 1 with the dollar.
Already, the figures announced by Eurostat for Greece, inflation has changed course and reached 3.9%, increased compared to September which had closed at 2.4%. On the other hand, inflation in the eurozone fell to 2.9% in October from 4.3% in September, the lowest rate in two years.
According to the forecasts of the financial staff, net income increased from 62.1 billion euros last year to 65.2 billion euros, while GDP increased from 183 billion in 2019 to 224 billion GDP this year and next year with 235 billion GDP. The growth rate is estimated to reach 2.3% this year. It should be noted that for the period January-September 2023 the amount of net revenues of the state budget amounted to 48,296 million euros, showing a small increase of 23 million euros compared to the target.