Another tax policy picked to rags
The government’s announcement of a “compassionate” tax break of up to 300 euros a month on tips earned via card payments was not met without complaints, as groups of workers doing equally hard and poorly paid jobs as waitstaff and delivery drivers also want to be included.
“A waiter’s needs are not greater than those of an assistant at an auto repair shop or a childminder or a supermarket employee, especially since the waiter already has an additional, untaxed source of income (albeit small, but completely off the books) from cash tips,” a commentary in the right-wing To Manifesto newspaper said.
There’s another thing beyond the supposed need of each sector; we say “supposed” because the “untaxed tip has nothing to do with the livelihood of waiters, but with the government’s polling needs,” the same piece added. After the huge efforts made to simplify the tax system, the government is gradually picking it apart, turning it into the raggedy mess it was before the crisis. Can anyone remember how many times the troika made a fuss to every government about the value-added tax that was different for different parts of the country? That measure was abolished by SYRIZA in 2017 and brought back by the incumbent New Democracy in 2021.
Tweaks, amendments and exceptions make for a tax policy that makes accountants’ heads spin and deprives state coffers of revenues. The more “special measures” that are introduced, the more work there is for the people who fill in tax declarations and for those who audit them – thousands of work hours the national economy could put to better use. They also create new windows of opportunity for tax evasion. The government has already said that “in order to prevent any unfair practices, if a reduction in an employee’s salary is found along with a simultaneous increase in their additional compensation, the employer will be required to pay a contribution equal to 22% of the reduction in regular earnings.” Seasoned tax evaders are shaking in their boots.
“In Greece, we tax the profession and not the income,” PASOK’s Pavlos Geroulanos said during the recent party chief election debate. True. Dividend rentiers pay a shockingly low 5%, professionals are in a different category, there’s yet another category for those who have revenue from rent, and the income from labor is taxed at between 9% and a whopping 44%. But this government went the extra mile, doing for tax law what the Americans did for physics in the Manhattan Project. It split labor income between one tax-free allowance for serving and another for tips.
