Greek Finance Minister Euclid Tsakalotos admitted in parliament on Thursday that the government has overtaxed the middle class and professionals in order to protect poorer Greeks.
On Wednesday, Deputy Finance Minister Giorgos Chouliarakis addressed the House saying that, “The tax burden on the 2017 and 2018 budgets is high. It is high for the honest and consistent taxpayers, the middle class and professionals. And it is a conscious choice that the government has made in order to help the weaker social strata.”
“Regarding overtaxing (the middle class and professionals), I agree with what Mr. Chouliarakis said, and I repeat that the priority we had was to deal with the humanitarian crisis at a time when we did not have any income from tax evasion,” the finance minister said.
Tsakalotos blamed the International Monetary Fund for forcing the government to overtax Greeks: “It was not the optimum solution, but was the outcome of pressure from the International Monetary Fund,” which he said always underestimates the performance of tax measures. “We did not want it – our arm was twisted,” he claimed.
In 2017, taxpayers earning more than 43,000 euros per year saw their taxes due rising, while those earning less than 43,000 paid higher “solidarity contributions”. Professionals and freelancers, and especially those earning between 30,000 and 32,000 euros per year, also paid more taxes this year.
All Greeks paid higher taxes in 2017 due to the value-added tax rate increases and the abolition of reduced VAT to island residents.