Chrysostomos Tsoufis

In the cabinet Kostis Hatzidakis he presented the prime minister with an offer he couldn’t refuse. It would extract public revenue and correct distortions and injustices without raising a single tax rate, which is a “taboo” for the government.

The new way of taxing freelancers is based on the idea that their income cannot be lower than that of a minimum wage worker.

Thus, in the following tax declarations, for this year’s incomes, no freelancer and self-employed person will be able to declare less than 10,920 euros. The upper limit is set at 50,000 euros as a series of assumptions are taken into account such as the years of activity, the turnover and the payroll of the employed staff, if of course there is one.

On the contrary, the first three years of work, any disability and also the place of work reduce the minimum income that must be declared.

As an additional incentive, for those who declare at least 5% above the minimum presumptive income the pretension fee from 2024 is reduced by 50%. For the rest, the reduction is 25%.

With the new system:

473,000 freelancers and taxpayers will be burdened with an average tax of 1444 euros
138,000 will have an average relief of 560 euros
124,000 will see no difference

Based The example given by the Ministry of Finance

Formerly self-employed with a declared annual income of €1,500, he had €135 in tax and €650 in business tax. Total €785. With the new system, we consider 14,196 as income and it will have an increase in burden by €1,038.

The effects of these changes are multiple:

INCOME INCREASE: The net income for the budget is estimated at €606 – after deducting losses from end-of-life discounts. Money that according to the Ministry of Finance will be directed to Health and Education. The new system will reveal material that is currently not taxed. It is estimated that self-employed people are currently taxed for a total income of €7.9 billion. With the new system, €13.35 billion will be taxed.

SOCIAL POLICY: It is estimated that freelancers and the self-employed will lose benefits of at least €100m. Benefits they now receive but normally should not receive. No freelancer from 2024 will get a Minimum Guaranteed Income while some thousands will lose e.g. housing and children. The money saved will go back to the truly weakest either by widening the income criteria for existing benefits or by creating new benefits.

DISTORTION CORRECTION: If someone studies the data of AADE, he will find that today:

4% pays 50% of that group’s charge

47% declare 0-1000€ annual income

27% declare 1001-3000€ annual income

After the changes:

12% will pay 50% of the total charge

17% will declare 0-1000€ annual income

54% will declare 1001-3000€ annual income

In other words, the problem of systematic under-declaration of incomes is improved to some extent

PROOF OF LIVING: The new taxation system essentially disables the presumption of subsistence. Calculations show that from 741 million euros, they will be reduced to 135 million euros in 2024, which facilitates the government’s goal of abolishing them. The Ministry of Finance will set up a committee that will examine how they should operate and whether they are fair.

AADE: The new taxation system will also facilitate the control of AADE. According to what is commonly known, the Authority will not need to deal with the “marida” and whether someone had to pay a tax of 1500 euros instead of 450 euros and focus its efforts on the “big fish” and why someone who had to pay tax 10,000 euros, receives a minimum guaranteed income.