While the Greek tax system has dominated the electoral agenda in recent days, the numbers and official tax filings underline the Greek “specialities”: on paper, there are no rich people in Greece. Only 27,000 citizens declare a personal income of more than 100,000 euros, and four out of ten live on 5,000 euros a year.

Fewer than 15,000 owners have personal real estate worth more than one million euros, and fewer than 70,000 depositors have large bank deposits worth more than 100,000 euros each.

Out of a total of approximately 300,000 legal entities operating in the country, only 10,000 declare taxable profits of more than €150,000, meaning even fewer (given that income tax and withholding tax must be deducted) can distribute dividends over 100,000 euros. On the contrary, 235,000 legal entities out of about 300,000, i.e. about 8 out of 10 companies, have either losses or profits less than what an employee with a minimum wage (10,000 euros per year) currently earns. What do all these testimonies show? Disclosure and proper accounting of income, assets and profits is critical in Greece so that tax policy can be developed more equitably.

Injustices in the tax system persist and even intensify over the years. A more typical example is the complete reversal of the relationship between direct and indirect taxes. According to official data from the Independent Public Revenue Authority, indirect tax revenues have now reached 33.2 billion euros (for 2022) and represent 60% of total tax revenue, compared to 53-54% 10 years ago. Changing the ratio without compromising tax revenue requires what is known as “broadening the tax base”, as without it there would be over-taxation of those who already declare their profits, incomes or assets.

What do business statistics show in Greece? The total taxable income of legal entities in the country is 14 billion euros. Even this year’s tax returns are expected to record significant growth due to the activity of mostly large companies in 2022. Of the 14 billion euros, 12 billion euros are distributed among 11,000 legal entities, with a profit (per company) before tax of more than 150,000 euros. Thus, the question of the tax treatment of such a limited number of companies (be it dividends or extraordinary taxation, etc.) is considered each time (due to the limited number) in combination with the consequences that may arise on business activities (for example, the transfer of headquarters apartments, layoffs, greater tax evasion, tax competition from third countries, etc.).

In the real estate sector, two out of three owners (more than 4.7 million people) have movable property that does not exceed 60,000 euros, and approximately 650,000 owners in addition do not cross the 80,000 euro barrier. About three out of four have fees of a few tens or a few hundred euros. About 1.7 million owners pay up to 100 euros, about 3.2 million pay from 101 to 500 euros and 1.4 million from 501 to 5000 euros. About 35,000 individuals pay from 5,000 euros and more, and “millionaire” owners who pay more than 500,000 euros each do not exceed 500. There are only 15,000 individuals in Greece with individual assets of more than one million euros.

Less than 70,000 depositors have large bank deposits exceeding 100,000 euros each.

As for individuals, the difficulty in defining the so-called “middle class” in Greece is due to the sheer number of individuals claiming extremely low incomes. Dividing taxpayers into ‘quartiles’ (a practice used by ELSTAT’s household budget surveys) would lead to the conclusion that the ‘middle’ 50% (that is, excluding those in the ‘poorest’ 25% and those in the the highest 25%) will also include those with an individual income even below 6000-7000 euros per year (simply because 4 out of 10 show an annual income below 5000 euros).

The formulation of the tax policy also takes into account the so-called elasticities:

1. The large increase in contributions in Greece for the self-employed (linked insurance premiums to income, 22% tax rate in the first bracket, solidarity contribution) recorded in 2016-2017 limited the taxable income of this group to 3.4-3.5 billion Euro.

2. Distributed dividends increased after tax cuts from €1.5 billion in 2018 and 2019 to €5.6 billion and €4.1 billion in 2020 and 2021, respectively.