Greek administration unveils tax cuts and incentives aimed at boosting birth rates
The Greek Prime Minister, Kyriakos Mitsotakis, has announced a significant tax reform, a move he claims to be the most ambitious in the last half of the century. This reform, set to take effect in 2026, aims to boost the country's dwindling fertility rate and encourage rural growth.
The economic crisis, which began 15 years ago, has taken a toll on Greece, particularly on its younger sector and fertility rates. Since the crisis began, the fertility rate in Greece has halved, currently standing at 1.4 children per woman. This has led to concerns about the country's future population growth.
To address this issue, the tax reform includes a reduction to zero for families with four children and low incomes. Additionally, there will be a two-point reduction in all income tax brackets. These measures are designed to provide financial relief to families and incentivise larger families.
Moreover, the reform includes deductions for residents in rural areas. The government aims to make housing in these areas more affordable, thereby attracting young families. The most inaccessible areas will be exempt from property tax, and funds are allocated for settlements with fewer than 1,500 inhabitants.
The economic crisis has also led to a significant population decrease, with more than 500,000 Greeks leaving the country. To combat this trend, the government is hoping that the tax reform will encourage people to stay and even return, particularly to rural areas.
If the current birth rate continues, it is expected that Greece's population will be eight million by 2050. This is a concern, as it is projected that 36% of the Greek population will be over 65 years old by that year. The tax reform, therefore, represents a crucial step in addressing these demographic challenges.
It's important to note that the government will lower taxes by a total of 1.6 billion euros in 2026. However, there is no information available about additional tax points being lowered beyond this amount.
This tax reform is part of a broader effort by the Greek government to address the challenges posed by the economic crisis. The crisis led to an international bailout agreed by the Greek government 15 years ago. The reform is a testament to the government's commitment to revitalising the economy and ensuring a sustainable future for Greece.
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