Greece's Ministry of National Economy and Finance published Finance Minister Kyriakos Pierrakakis’ parliamentary speech on a bill to implement a tax reform focused on demographic pressures and middle-income households, alongside broader support measures for the economy. The package is framed as delivering tax relief and targeted incentives, with an estimated fiscal cost of EUR 1.76 billion in the first year and an average cost of EUR 2.5 billion from the second year onwards. At the core, the bill would reduce personal income tax by two percentage points per income bracket, with additional reductions linked to the number of children. Rates would fall to 20% for EUR 10,000 to EUR 20,000, 26% for EUR 20,000 to EUR 30,000 and 34% for EUR 30,000 to EUR 40,000, while introducing a new 39% bracket for EUR 40,000 to EUR 60,000 and keeping 44% for higher incomes. The first EUR 20,000 would be taxed at 18% for one child, 16% for two, 9% for three and 0% for four or more children, with the speech estimating around four million taxpayers would see higher net income. Measures also include a presumptive-income exemption for self-employed new mothers for the child’s birth year plus the following two years, a zero income tax rate up to EUR 20,000 for those up to age 25 and a 9% rate for ages 26 to 30. On property and indirect taxes, ENFIA would be cut by 50% from 2026 and abolished from 2027 for primary residences in settlements up to around 1,700 residents, except for homes valued above EUR 400,000, and VAT would be reduced by 30% for specified Aegean border islands, Samothrace and smaller Dodecanese islands. Additional elements include a 25% intermediate rate for rental income of EUR 12,000 to EUR 24,000, extensions through 2026 of the VAT suspension on new buildings and an income tax exemption linked to bringing vacant homes back into longer-term use, a 30% to 35% reduction in presumptive living-expense indicators for homes and cars, a double deduction for qualifying business spending in strategic sectors, and extensions to electronic-payment incentives including double-counting certain healthcare-related expenses towards required e-transaction thresholds. The minister noted that a separate measure announced for pensioners to phase out the offset of pension increases against the “personal difference” is not included in the bill and would be advanced after completion of an actuarial study.
Ministry of National Economy and Finance (Greece) 2025-11-07
Greece's Ministry of National Economy and Finance sets out income tax cuts and phased ENFIA abolition in a EUR 1.76 billion tax reform bill
Greece's Ministry of National Economy and Finance introduced a tax reform bill to address demographic pressures and support middle-income households, costing EUR 1.76 billion in the first year. Key measures include reduced personal income tax rates, family incentives, and cuts to property and indirect taxes, like a 50% ENFIA reduction from 2026 and a 30% VAT cut for certain islands. Additional provisions offer tax exemptions for young individuals and new mothers, plus incentives for strategic business spending and electronic payments.