Perhaps the most important growth that affects all citizens without any exclusions, is the VAT increase from the 1st day of the New Year, which rises from 18% to 19%. In general, 2014 provides more reductions in wages, increases on fuel and VAT and also increases on the contributions to the Social Insurances Fund.
Fuels are on fire
The increase’s dance starts from the first day of the New Year with an increase of the fuel duty on motor fuels by 5 cents a liter. This kind of increase comes second in a row, since January 2013 an increase of 7 cents had been imposed. More specifically, we have:
1. From 0 – 120g of carbon dioxide the cost is 0.05 cents to the maximum charge of € 60.
2. From 121 – 150g of carbon dioxide the cost is € 3 with the maximum charge of € 150.
3. 150g of carbon dioxide and more, the cost is € 8 and there is no maximum charge.
Amidst all this, we must not forget that the corporate tax rate will be at 12.5 %, the tax on the interest income at 30 % and the bank fee at 0.15 %.
VAT will ‘rise’ as well
The increases will continue with a VAT increase on January 13 from 18% to 19% and the reduced VAT rate from 8% to 9 %.
The temporary tax on gross earnings in the public and private sector will be extended until 2016. More specifically, the employees with a monthly salary of 1,501 to 2,500 euros will contribute 2.5 %. The workers with monthly earnings up to 3,500 euros will contribute at 3% of their salary and the workers with monthly earnings in excess of 3,501 euros will contribute at 3.5%.
2014 is bringing new cuts to the salaries of the civil servants, which will be horizontal by 3 %.
Increase in Social Insurances as well
An increase of the employees and employers contributions in the Social Security System is also predicted, by an additional percentage point over pensions. This means a 0.5 percentage point from employees, a 0.5 percentage point from employers and 1 percentage point in the case of self-employed. Please note that this measure will be effective from 1 January 2014.
Expenditure measures
Measures to reduce costs include:
– The reduction of total expenditure on social transfers, by at least € 28,5 through rationalization and better targeting of child benefits, student grants and abolition of social cohesion that are provided by the social welfare.
– The application of a further reduction of 3%, on the salaries of employees and retirees of the public and greater sector.
– The establishment of fee on monthly passes for the use of public transport by students and pensioners.
-The introduction of structural measures in the education system. The measures include, inter alia, the reduction of the number of the posted in the Ministry of Education and Culture. The removal of the ratio 1:1.5 of the teaching time on evening schools of general, technical and vocational education. The instructive discount that is offered to those who teach in two or more educational regions is also included, so as the costs reduction for afternoon and evening programs.
Measures of income
Regarding measures for revenue growth in 2014, these include:
– The extension of the temporary levy on gross salaries and pensions of the workers in the public and private sector by 2016. Salaries from € 0 to € 1500 will not be cut, salaries from €1501 to € 2500 will be cut by 2, 5%, from € 2501 to € 3500 by 3% and over € 3501 by 3, 5%.
– An increase on the standard VAT rate from 18% in 2013 to 19% in 2014.
– An increase of excise fuel duty by € 0, 05.
– An increase on employees and employers contributions from 1.1.2014 by 1 percentage point for the pensionable earnings, meaning 0.5 percentage point from employees, 0.5 percentage point from employers and 1 percentage point in the case of self-employed.
– A tax system reforming for motor vehicles that will have an effect from the financial year 2014.
