Prime Minister of Greece on the eve of the elections announced tax cuts

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GREECE, ATHENS (VOP TODAY NEWS) — The Greek government reduces from 24% to 13% of VAT on catering and food, electricity, restores the 13th pension, cancels the “solidarity tax” from low incomes, said Prime Minister Alexis Tsipras at a press conference with the ministers of the economic bloc of the government.

The press conference was broadcast live by the Greek public television ERT.

Taxes were sharply raised in July 2015 during a severe economic and financial crisis. This led to a price increase of more than 9%.

Tsipras announced tax cuts on the eve of elections to local governments, regional governors and deputies of the European Parliament. The possibility of reducing the tax burden Tsipras explained by improving the situation in the economy.

“There is a significant part of Greek society, which bore a disproportionately heavy burden and still did not feel the positive consequences of having withdrawn from the memorandums with creditors. But now it is time to get justice for the victims of the Greek people,” said Tsipras.

“The package of measures will help to increase the growth rate of the Greek economy, but it will also give an opportunity for many to finally feel the benefits of economic growth,” said Tsipras.

VAT on catering establishments will be reduced from 24% to 13%, as well as on all food products. The VAT on energy (electricity and gas) will drop from 13% to 6%, the prime minister said.

Reducing VAT to a level of 13% to 11% is expected for pharmaceuticals, medical equipment, basic necessities to stimulate consumption, the premier said.

“We are moving towards ensuring a permanent 13th pension, which will cost a total of 800 million euros,” said Tsipras.

According to him, with pensions up to 500 euros, pensioners will receive 100% of their pension, for pensions from 501-600 euros, an additional pension will be 70%, from 601 to 1000 euros – 50%, and the 13th pension for those with a basic pension over 1000 euros, will be 30% of the pension.

Taxes were raised, and 13th pensions were abolished at the request of creditors to reduce the budget deficit.

Tsipras also said that in 2020, the “solidarity tax” will be abolished on income of up to 20,000 per year and reduced for higher incomes.

Now the Greeks pay 2% of the “solidarity tax” to help the most vulnerable people with incomes of up to 20 thousand euros, for them the tax will be reset. On incomes up to 30 thousand euros, the tax will be 2% instead of 5%, on incomes up to 40 thousand euros – 4% instead of 6.5%, on incomes up to 65 thousand euros – 6% instead of 7.5%. Those who receive up to 220 thousand euros will pay 8% instead of the current 9%.

“In addition, we are starting to subsidize insurance premiums for enterprises and young workers up to 25 years old,” Tsipras said. Support measures in 2020 will cost 1.3 billion euros, the prime minister said.

This article is written and prepared by our foreign editors writing for VOP from different countries around the world – edited and published by VOP staff in our newsroom.

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