Greece's government is preparing a phased, two-to-three-year plan to reduce the presumed income tax burden on self-employed professionals, aiming to address discontent that has built up since the system was introduced in 2023.
According to calculations by the government's economic team, the total fiscal cost of the measures will run to around 400 million euros, spread across two or three years. Final decisions are expected in the coming days, by the end of the month.
Self-employed workers are considered a critical voting bloc for the ruling New Democracy party. The category backed the governing party by large margins in the last election, but opinion polls since the start of the year have shown New Democracy struggling to hold onto support among this group.
Why the presumed income system matters
The presumed income system, introduced in 2023, sets a minimum taxable income for self-employed professionals regardless of what they actually earn, based on criteria such as payroll costs and the minimum wage. It has caused significant frustration within the professional class since it took effect.
The prime minister's office is reportedly wary of appearing to reverse the tax reform altogether. As a result, the new measures now under discussion would apply only to professionals with a consistent record of tax compliance, under a specific plan designed not to significantly dent state revenue.
What is on the table
Officials are currently discussing corrections to distortions identified in the system, aimed at further easing the tax burden on compliant professionals. Prime Minister Kyriakos Mitsotakis is expected to announce the overall plan from the podium of the Thessaloniki International Fair, outlining a path toward the full abolition of the presumed income system starting next year, likely including larger deductions, lower rates and expanded exemptions for vulnerable categories of professionals.
Among the options being discussed within the government team, the finance ministry is leaning toward fully or partially decoupling the minimum presumed income from increases in the minimum wage, so it does not rise automatically every time the minimum wage goes up.
A second option under discussion would trim the criterion tied to annual payroll costs, so that an employer's presumed income would not automatically increase if they pay staff above the minimum wage or employ workers with many years of service. A third option would widen exemptions based on geographic criteria.
Government spokesperson's comments
Government spokesperson Pavlos Marinakis previewed the initiative on Friday, saying the government's goal was not to keep the presumed income criteria in place permanently. He said that once the other measures to combat tax evasion had been implemented and had shown results, the government would look to gradually withdraw the criteria.
Marinakis said that as those measures are applied and produce results, the presumed income criteria should gradually be withdrawn.
The Thessaloniki International Fair, an annual trade fair, traditionally serves as the venue where Greek prime ministers announce major economic policy for the year ahead.
