Taxation and Tax Evasion
The Greek tax system is a tiered one, as Greece employs the system of progressive taxation. Greek law recognizes six categories of taxable income: immovable property, movable property (investment), income from agriculture, business, employment, and income from professional activities. Greece's personal income tax rate up until recently ranged from 0% for annual incomes below €12,000 and 45% for annual incomes over €100,000. Under the new 2010 tax reform, tax exemptions have been abolished.
Also under the new austerity measures and among other changes, the personal income tax-free ceiling has been reduced to €5,000 per annum while further future changes, for example abolition of this ceiling, are already being planned.
Greece's corporate tax has dropped from 40% in 2000 to 20% in 2010. For 2011 only, corporate tax will be at 24%. Value added tax (VAT) has gone up in 2010 compared to 2009: 23% as opposed to 19%.
The lowest VAT possible is 6.5% (previously 4.5%) for newspapers, periodicals and cultural event tickets, while a tax rate of 13% (from 9%) applies to certain service sector professions. Additionally, both employers and employees have to pay social contribution taxes, which apply at a rate of 16% for white collar jobs and 19.5% for blue collar jobs, and are used for social insurance.
The Ministry of Finance expects tax revenues for 2012 to be €52.7 billion (€23.6 billion in direct taxes and €29.1 billion in indirect taxes), an increase of 5.8% from 2011. In 2012 the government is expected to have considerably higher tax revenues than in 2011 on a number of sectors, primarily housing (an increase of 217.5% from 2011).
Read more about this topic: Economy Of Greece
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—William Howard Taft (1857–1930)
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—Ralph Waldo Emerson (1803–1882)