ATHENS: Prime Minister Kyriakos Mitsotakis has announced substantial income tax breaks aimed at supporting households with children as part of a comprehensive 1.6 billion euro tax reform package.
The tax deductions were revealed during his annual economic policy speech as his government addresses declining popularity linked to persistent cost of living challenges and corruption allegations.
Strong economic growth, an above-expectation budget surplus, and improved tax collection efficiency will fund the measures scheduled for implementation in 2026.
Mitsotakis stated that supporting household income remains an absolute priority given the financial pressures facing Greek citizens.
Greece’s economy has recovered significantly since the 2009-2018 debt crisis, primarily driven by tourism, and is nearing its pre-crisis size.
The country nevertheless maintains Europe’s highest debt levels while disposable incomes continue to lag behind the European Union average despite substantial minimum wage increases.
The tax reform package reduces taxation by two percentage points across all income brackets and introduces a zero tax rate for low-income families with four children.
Mitsotakis also confirmed pension increases and the elimination of real estate taxes in remote areas to encourage migration from major cities.
His centre-right New Democracy party has experienced a significant drop in approval ratings from 41% in 2019 to current levels of 22-25% in recent opinion polls.
Thousands of protestors gathered in Thessaloniki during Mitsotakis’ speech demanding higher salaries and improved living standards through separate trade union demonstrations. – Reuters