The package of measures includes the abolition and reduction of taxes, increases in wages and pensions, the establishment of benefits, special aids
series of interventions, which, according to the Ministry of Finance, will contribute to partial income enhancement and mitigating the effects of high inflation is set to be implemented from the beginning of the year by the government.
The package of measures in question have both a permanent and an extraordinary nature, and their amount amounts to a total of 4.2 billion euros. They include the abolition, but also the reduction of taxes, increases in wages and pensions, the establishment of allowances, special aids, etc.
The first to see increases in their salaries are, from the very first month of the new year, civil servants due to the abolition of the solidarity contribution and the special contribution of 1% in favor of the Welfare Fund.
Also, pensioners will see their salaries increase after 12 years, while for employees in the private sector, the abolition of the solidarity contribution and the reduction of 3 percentage points in insurance contributions, which had brought an increase in salaries, but were of an extraordinary nature, are permanent.
It is also expected to increase the income of the doctors of the National Health Service, as well as the executives of the Armed Forces.
In addition to a direct increase in wages, the indirect strengthening of incomes through the reduction or freezing of taxes is also foreseen. More specifically, support for the real estate market continues with a “freeze” of VAT on construction, capital gains tax and an extension of the “bonus” for the renovation of real estate for two more years, while the reduced VAT rates on cafes, restaurants, transport are extended until end of June 2023.
More specifically, the package of measures for 2023 includes:
* Solidarity contribution: Permanent repeal for all taxpayers. Thus, after the employees of the private sector, it is the turn of civil servants and pensioners, who will see their salaries increase from the first month of the new year. The annual benefit for taxpayers with an annual income of more than 12,000 euros starts at 22 euros and can exceed 676 euros for higher incomes. For example, for a civil servant with an annual income of 18,000 euros the relief will be of the order of 132 euros per year.
* End vocation: Conditional abolition for aspiring and small businesses, with a gross revenue of up to 2 million euros per year, provided that they increase the average annual number of full-time employees by at least 3/12 per year. The exemption concerns the year in which the increase takes place.
* Insurance contributions: Permanent reduction by three percentage points of the insurance contributions of private sector employees.
* Pensions: 7.75% increase in pensioners’ salaries of all funds. The measure concerns 94.6% of pensioners.
* Maintenance of reduced VAT rates, until June 2023, in passenger transport services, in non-alcoholic beverages and beverage services, in cinema, theater and concert tickets, in gyms and dance schools and in the tourist package.
* Suspension of VAT for new buildings until the end of 2024
* Keeping the tax bonus for home renovation and repair.
* Suspension of capital gains tax 15% on real estate sales until the end of 2024.
* Subsidy of photovoltaic installation panels in households, businesses and farms to save energy.
* Renovate/Save and Renovate/Rent Programs with which subsidies are provided for the renovation and energy saving of homes, as well as a low-interest loan program for the purchase of a first home by young people and young couples up to 39 years of age.
* Extension of maternity allowance in the private sector from 6 to 9 months to deal with low fertility at a budget cost of 64 million euros.
* Increased housing benefit to support students studying away from their place of residence.
* Reform of the special salary of the National Health Service doctors and wage interventions to support the Armed Forces executives.
Finally, the procedure for increasing the minimum wage will begin immediately, which will take effect from May 2023.
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