The government is preparing a new benefits package: What will it include?

Chrysostomos Tsoufis

In the 3rd decade of February, the government will be ready to say approximately how much fiscal space it will have created and where it will direct it shortly before the elections.

A safe assessment of its size cannot yet be made, the only certainty is, as Christos Staikouras repeats, that a fiscal space has begun to form.

According to Kyriakos Mitsotakis, the government’s number 1 concern is accuracy on the shelf, a fact that puts on the table of pre-election benefits this time a repetition of the accuracy check given at Christmas and Easter 2022.

There are also thoughts about one – a temporary reduction in insurance contributions – that will accompany the third increase in the minimum wage in the last 16 months and will make it more….digestible for employers.

However, the prime minister did not fail to note that many times the government has surprised with measures that did not belong to the ….journalistic lists.

The amount of fiscal space will depend on 3 factors.

The first is the execution of the 2022 budget.

The primary result will be much better than the 1.5% deficit estimated by the Ministry of Finance as the traffic taxes and the last installment of Anfa’s remain to be collected until the end of February.

An upward revision of the GDP is also expected, in March of course.

The second factor has to do with natural gas prices which remain in the range of €65-67/Mwh.

Given that the budget is structured at a price of €120, this means that if all this continues then a large part – if not all – of the €600m that the government has set aside, will be available for other …. uses.

Third agent equally important, tourism receipts with bookings so far auguring for another excellent year.

What is certain that will not be done before the elections is a reduction in indirect taxes.

The prime minister reiterated the government’s position that such a temporary measure to tackle punctuality and ..costs and does not reach consumers.

However, after the elections and outside the context of a crisis of accuracy, things are different and Kyriakos Mitsotakis in essence announced it and gave it permanent features in the context of the pre-election program of the New Democracy.

Among others, the pre-election program is expected to include:

• The further reduction of insurance contributions
• The phasing out of the pretense fee
• The gradual abolition of presumptions
• The reduction of business taxation
• Reduction of advance tax
• Interventions in the tax scale of natural persons
• Changes to self-employment taxation
• New salary in the State from 2024

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