More than six million taxpayers in Greece, a total of approximately nine million (a ratio of 7 out of 10), declare to the Tax Office annual incomes of less than 10,000 euros, with the total amount amounting to 18.3 billion euros. €
However, due to the fact that approximately two million taxpayers declare incomes lower than those determined by the Tax Office on the basis of the presumptions of subsistence, the total taxable income of those who declare up to 10,000 euros per year finally amounts to 24 billion euros, i.e. by 5.7 billion euros higher than what they have written on the forms of the Tax Office.
These impressive figures result from the annual clearances of the tax returns submitted every year in Greece by 8,929,000 citizens who have a tax number, with total taxable incomes amounting to approximately 86 billion euros.
It is worth emphasizing that most of the income below the €10,000 range is tax-free as it mainly comes from wages or pensions.
Also, the tax-free limit of 10,000 euros was on the pre-election agenda of the parties, as both New Democracy and SYRIZA committed pre-election to increase the tax-free limit in the coming 4 years so that even more people will be exempt from taxation.
New Democracy has included in its program for the next four years the commitment to increase the tax-free allowance by 1,000 euros for each child, while SYRIZA is talking about increasing the tax-free allowance for everyone without exception (not only for employees and pensioners but also for other categories of citizens) at the level of 10,000 euros and from there on the amount should be increased according to the number of children in the family.
Based on the latest available data from the AADE, out of a total of 8,929,096 taxpayers, those who declare annual incomes below 10,000 euros amount to 6,045,895 citizens.
This fact is also the main reason why the Ministry of Finance for many years does not “abolish” the so-called “deemed income” [enforced by the country’s lenders in 2011 in the context of the first bailout] as they competently consider that many of the above citizens do not declare their real incomes because they evade taxes.
On the other hand, the “deemed income” in many cases catches taxpayers who declare everything they collect on an annual basis to the Tax Office up to the last euro but because of some assets they may have inherited, such as a property or car, the state considers that with the incomes they declare they cannot justify their maintenance and therefore evade taxes. That is why a tax is imposed on them on a fictitious-imputed.
The fact that 1,570,769 taxpayers show to the Tax Office an annual income of up to 1,000 euros, with the total amount of this amounting to 170 million euros, is quite impressive.
In fact, of these, 803,685 taxpayers do not declare that they receive even 1 euro annually.
1,000 to 5,000 euros
Very low incomes from 1,001 to 5,000 euros are reported by 2,067,972 of our fellow citizens annually. Also, 2,407,154 taxpayers show an annual income of between 5,001 and 10,000 euros to the Tax Office.
Worth mentioning is the fact that 14,720 taxpayers declare an annual income of more than 100,000 euros.
Income 5.6 million euros
There are also 591 taxpayers who declare an annual income of over 900,000 euros each and a total of 3.34 billion euros. That is, on average 5.6 million euros.
3% represents 21.7% of incomes
The number of citizens who declare an annual income of more than 36,000 euros is just 3% of the country’s population that has a tax identification number and submits a tax return, or in absolute numbers 260,146.
This 3% represents 21.7% of total taxable income.
While it is true that using imputed income can be unfair because it assigns income tax assessments on those that have assets but little income, it also suffers from an opposite problem.
Unless things have changed recently the second problem with imputed income is that it is based on things like property area and vehicle engine capacity not on commercial value. A 100 sqm apartment in Kolonaki used as an office by a doctor or a lawyer has the same imputed income as a 100 sqm cottage in an island village. A 2,000 cc Ford Fiesta has the same imputed income as a 2,000 cc top of the range Mercedes. Often it is more cost effective for a central Athens doctor or lawyer to declare a low income and let the tax man hit them with tax based on imputed income than to declare their real income.