Changes to the VAT rates, increases for pensioners and civil servants, as well as the unfreezing of the three-year period in the private sector, are brought for 2024 by the budget that will be submitted to the Parliament on Tuesday.

The interventions foreseen are precisely costed and aim to substantially strengthen disposable income with permanent measures, to cover basic needs for the weakest, but also to bridge the injustices brought by the memoranda to specific social groups.

What does the new budget provide?

1) Changes in the VAT rates of certain products and services. More specifically:

-Reduced VAT rates on public transport tickets and tourism are fixed, extended for six months until June on coffee and taxis.

– The VAT rate on soft drinks provided by catering establishments returns to 24%.

-Transport: Covers tickets for train, metro and tram routes, city and intercity buses, air and ferry tickets, as well as transport by a combination of road, air and sea means. Separately the reduced rate of 13% for taxi fares is extended for six months until the end of June 2024.

-Tourist package: A 13% VAT is imposed on the accommodation tariff with breakfast or half board. For the full board stay only 5% of the single price is subject to the standard VAT rate of 24%. The remaining 95% is charged at 13%. For the stay with the all-inclusive system, 90% of the single price is subject to VAT at a reduced rate of 13%.

-Culture: Cinema tickets are charged at a reduced rate.

– With regard to coffee and beverages served by catering establishments, the reduced VAT measure is extended for another six months, while for soft drinks served by catering establishments, the VAT returns to 24%.

Increases in civil servants

The new budget provides for increases in the salaries of civil servants after 13 years. The new salary schedule, which will be effective from January 1, 2024, provides for:

-a 70 euro increase in the basic salary,
-higher child benefit from 20 to 50 euros
-indirect increase from 6.4 to 18.3 euros due to the reduced deduction in the amount of tax from the increase of the tax-free by 1,000 euros for families with children.

The average annual benefit for each employee is calculated at 1,476 euros net.

Increases in pensions

Increases are also planned for pensioners. From January 1, 2024, almost 1.8 million pensioners with a personal difference of up to 10 euros will get an increase of around 3%.

At the same time, the 30% tax on pensions for employed pensioners is abolished and replaced by a 10% levy on the additional remuneration they receive from their work.

Emergency aid for pensioners

Pensioners with a pension of up to 1,600 euros and with a difference of more than 10 euros are not entitled to an increase. However, they will receive an extraordinary aid of 100 to 200 euros before Christmas, while 150 euros will be given to around 1.3 million low-income pensioners with a main pension of up to 700 euros and no personal difference.

“Thaw” of three years

The big cut that is foreseen, however, is the reinstatement of the three-year seniority in the private sector. Based on the memorandums, Greece could not restore the three years before unemployment fell below 10%. However, the rapid improvement in the indicators of the Greek economy, convinced the partners that the three years can be restored almost a year and a half earlier.

Therefore, the salary for several thousand workers will be adjusted from January 1, without counting the increase in the minimum wage, which is expected to be announced by the government.

Those employees who are paid the minimum wage or daily wage, the time of a dependent contract or employment relationship, which has been spent with any employer and in any specialty, before February 14, 2012 and after January 1, 2024, is recognized as seniority.

Minimum Guaranteed Income

A total of 210,000 beneficiaries of the minimum guaranteed income will receive an additional 50% of the monthly benefit. From December, as has been announced, the minimum guaranteed income is increasing by 8%.

In addition, the budget foresees the increase of OPEKA and DYPA/OAED allowances by 10-15 euros and the maternity allowance for professionals and farmers with an income of up to 630 euros per month.

The budget also includes a 10% reduction in ENFIA for those who have insured their property against natural disasters, but also the extension to 9 months for the maternity allowance in the private sector, the self-employed and farmers.