Despite growth, incomes have kept falling

Taxable incomes are set to decline again this year, resulting in a further drop in takings for the tax authorities.

In the last four years, according to the tax declarations of the country’s 6.3 million households, Greece has failed to see confirmation of the rule that economic growth brings higher incomes and therefore greater income tax revenues for the state.

Since 2015 there has been a constant reduction in taxable incomes and assets even though today’s gross domestic product is higher than it was four years ago. The sum of incomes in 2015 tax statements – concerning 2014 earnings – amounted to 76 billion euros, with GDP at 177 billion. Last year declared incomes added up to just 73.6 billion euros although GDP came to 183.7 billion.

The amount of taxes paid by individual taxpayers was the same in 2018 as 2015 despite the dozens of new taxes imposed in those four years, many of which concerned direct taxation.

The processing of data also reveals that economic growth has not only failed to result in higher incomes, but has also been accompanied by an increase in the tax burden on households, especially the usual taxpayers who bear the bulk of taxes, i.e. salary workers and pensioners: Taxes on salary workers have grown 13 percent in those four years and taxes on pensioners have expanded 6.34 percent.