Refineries to pay for retirees
The high retail prices and the increased international coffee rates have forced the government not only to extend the value-added tax rate reduction to 13% but to make it permanent. At the same time, aiming to support vulnerable households, the government decided to impose a temporary solidarity contribution of 33% on refining companies based on the surplus profits of the previous tax year, from which it hopes to collect around 300 million euros.
Last year the excess profits of refineries were also taxed, with state coffers adding around 340 million euros to their takings.
According to plans, the levy will be calculated based on the excess profits of the tax year 2023, as defined by the regulation – i.e. 33% of the taxable profits of 2023, which exceed 20% of the average results of years 2018 to 2021. Prime Minister Kyriakos Mitsotakis told Real FM: “I think it is a fair decision because indeed our refineries made very high profits compared to their historical earnings as a result of changes made in the international oil market… And because we will hear various arguments from the opposition, who claimed that we should impose a tax of 90%, we wanted a fair taxation of corporate profits as well. We do not confiscate business property or punish healthy entrepreneurship.”
Calculated on the basis of the surplus profits of 2023, the 33% levy will be ascertained within 2024 and will be reflected in the declarations of the companies for this year.
National Economy and Finance Minister Kostis Hatzidakis announced the proceeds will be used mainly for the support of pensioners in December, who due to a personal difference do not benefit from the new increase in pensions from January 1, as well as for the strengthening of the credits of the Public Investments Program.
According to government sources, most of the amount will go to pensioners, disabled people and other vulnerable groups. At the ministry they are starting to perform an exercise in order to know how many pensioners there are who will not have an increase in their pensions from January next year.
