Prime Minister Kyriakos Mitsotakis announced on Wednesday that the so-called “solidarity levy,” an extra surcharge tax on incomes, will be abolished from January 2023 and that pensions frozen since 2010 will be allowed to increase again.
“It is a double resounding signal that the country’s growth must benefit everyone without putting fiscal balance and the Greek economy’s competitiveness at risk,” Mitsotakis told lawmakers during a debate in Parliament called by the prime minister to present his government’s work on social issues.
He said that pensions “will be placed on a course of regular and permanent increases” as of 2023 and that the abolition of the solidarity tax will apply to everyone – private and public sector employees, as well as pensioners.
The solidarity levy was imposed in accordance with the provisions of the first bailout in 2010 initially as a “provisional fiscal measure” to which even low-pensioners fell victim.
The measure was modified in the past and ended up to be imposed on annual incomes starting with 12,001 euros. The levy was calculated in several %-income-categories, however, there was a cap with the effect that those with annual income 50,000 to 60,000 euros would pay the same levy as those with incomes over 100,000-200,000 euros.
It was abolished for workers of the private sector two years ago, but continued for the public sector.
PM Mitsotakis had initially pledged to abolish the levy for one year (2021) in September 2020, as part of a tax relief package to boost jobs amidst a recession caused by the coronavirus pandemic, but the plan was postponed as the economy took a downturn.
According to state broadcaster ERT, the solidarity levy brings 460 million euros per year.
