We face a problem of tax evasion with courage and common sense, said the Minister of National Economy and Finance, Kostis Hatzidakis, regarding the taxation of self-employed professionals, responding to the cross-party “fire” received by the government’s financial staff in Parliament, regarding the new provisions of the bill to limit tax evasion.

We have to answer “if we want the employees and pensioners to pay for everything, let us know. However, we don’t want to,” said Mr. Hatzidakis and added: “At the end of the day, for each of us, there is also our conscience, at least mine says that I cannot accept that the self-employed pay much less tax from his average employee”.

The minister responded with “ten truths” to the “ten myths” that have been told in the public debate about freelancers.

Particularly:

1. To the claim that the government is “targeting freelancers”, the minister replied that the government is “targeting tax evasion”, because the official data of AADE shows that 71% of freelancers declare an income lower than the minimum wage, 54 % reported zero income or losses last year, and 27% reported five consecutive years – 2018, 2019, 2020, 2021 and 2022 – of losses or zero income. Also, within the freelance industry, there is a great deal of injustice, as the 4% currently pay 50% of the freelance industry taxes. The Minister of National Economy and Finance also said that freelancers who declare from 10,000 euros and below, currently pay 867 tax a year, while the average wage earner who can also be their employee, pays 1160 euros a year. “It’s something we have to think about. The employee should pay more than his employer”, said Mr. Hatzidakis.

2. To the claim that the government had a hidden agenda and did not say before the election what its intervention would be, Mr. Hatzidakis said that the government had said before the election that it would abolish the pre-election fee in a 3-year period. “We are abolishing it in a two-year horizon, bringing its abolition further forward. We had also stated that this would be combined with the tax compliance of the industry and that is what we are seeking to do at this time,” said Mr. Hatzidakis.

3. To the claim that with the proposed provisions “the self-employed are being burdened with a horizontal measure”, the minister replied: “What we are doing is that we are establishing a presumption with a reference point of the minimum wage and saying that the personal contribution of a self-employed person to the business of it, it is not reasonable to value it lower than the salary of the employee who is paid the minimum wage”. On this, there are exceptions and gradations, for example downwards there are exceptions for start-ups. The presumption is reduced for young professionals, for those operating in areas with a small population, single parents with minor children, and those with many children. Full exemption applies, inter alia, when there are special reasons (e.g. illness, military service, natural disasters, force majeure, etc.), for the self-employed with PPE at up to 3 employers (“blocks”), as well as for farmers. On the other hand, the amount of the presumption varies depending on the years of professional activity, the total payroll and the amount of the company’s turnover in relation to the industry average. During the consultation, we took into account comments on the turnover criterion, we introduced a more linear and fairer method, “but you can’t call it a horizontal measure with so many gradations and exceptions”, said Mr. Hatzidakis.

4. In the claim that “the government establishes exceptions, but there are freelancers who are wronged nevertheless and may actually earn less than their employees”, the Minister of Economy and Finance pointed out that the bill provides that anyone who believes that they are being wronged can to go to the competent authorities and prove that he is wronged. After all, this is a possibility provided for in the presumption of living that has been in effect for many years (46 citizens applied last year).

5. In the claim that this is a measure that hunts entrepreneurship, Mr. Hatzidakis recommended not to confuse entrepreneurship with delinquency. After all, measures have been taken to encourage healthy entrepreneurship.

6. In the claim that the presumption constitutes a retreat, Mr. Hatzidakis pointed out that today the system of objective values ​​is applied, so that there is a way to assess the value of real estate in sales. There is also the presumption of living and it is taken into account for taxation, in case someone has a swimming pool, a holiday home, a big car… These are presumptions that have been applied by many governments, the finance minister pointed out and underlined that such presumptions also apply in other countries like France or Italy.

7. In the claim that the government does not use technology to deal with tax evasion, Mr. Hatzidakis referred to the interconnection of POS with cash registers, electronic invoices and MyData, these are interventions that are also included in the bill.

8. To the claim that the government does not deal with the “big fish” and leaves out major tax evasion cases, Mr. Hatzidakis replied that there are interventions for fuel in the bill. He recalled the burdens of electricity producers in recent years, the burdens of refineries, the fact that in recent years more and more amounts have been collected from the corporate tax. He added that with the imputed determination system, part of the control mechanism will be freed up to focus on the “bigger fish”.

9. To the claim that the self-employed are being led to tax extermination, the minister replied that the tax burden is 0.8, it will go to 1.1 – and this while in the EU the burden is 2.1. “However you measure it, we go a little higher than the average wage earner. This happens. We have to have the whole picture. What does the freelancer pay, what does the pensioner pay, what does the employee pay. If we want the employees and pensioners to pay for everything, let us know. However, we don’t want to,” said Mr. Hatzidakis.

10. To those who accuse the government of ignoring-turning a deaf ear to the reactions, the minister replied: “We are not ignoring them at all. We talk to everyone without exception. We consulted on the bill and made significant interventions after that consultation. Of course we discuss and continue in Parliament and with social groups. We listen to every reasonable comment. At the end of the day, for each of us there is also our conscience. At least mine says that I cannot accept that the self-employed person pays much less tax than his average employee”, said Mr. Hatzidakis.