As Greek government prepares to unveil a new package of tax relief measures at the upcoming Thessaloniki International Fair, a central question is drawing increasing attention: will these policies help reduce the country’s persistent income inequality, or risk exacerbating it? The government is aiming to support the middle class—defined as individuals earning between €20,000 and €50,000 annually—at a time when the nation’s inequality indicators have shown little to no improvement.
According to Greece’s national statistics agency, ELSTAT, the country’s Gini index, which measures income inequality across the population, held steady at 31.8% in 2024, based on income data from the previous year. The S80/S20 ratio, which compares the income of the top 20% of earners to the bottom 20%, saw a minuscule decline of 0.01 points, reaching 5.27. Meanwhile, the middle 50% of the population—those in the second and third income quartiles—continued to control 44% of total disposable income, a figure that has not changed from the year before.
In this context, the government is finalizing a series of tax reforms intended to ease the burden on middle-income households. Among the proposals being discussed is a reduction in the income tax rate for earnings between €10,001 and €20,000, possibly lowering it from 22% to 15%. There is also consideration of raising the threshold at which the top income tax rate of 44% is applied. A broader adjustment would involve indexing tax brackets to inflation, in order to prevent taxpayers from being pushed into higher tax categories due to increases in nominal—rather than real—income.
Other planned measures include further reductions in property taxes (ENFIA) for families with children, and expanded deductions for property owners who insure their homes. The government also aims to crack down on undeclared rental income by lowering the minimum tax rate on rents from 15% to 5% for annual income up to €5,000, in hopes of incentivizing compliance. At the same time, there are plans to phase out or significantly reduce the so-called "presumed living expenses" system—a set of imputed costs that often disproportionately penalize low-income earners whose declared incomes do not align with their lifestyle.
Despite the broad scope of the proposals, experts remain cautious. While the focus on the middle class is politically significant, there are concerns that the benefits may be unevenly distributed. Greece continues to experience some of the highest levels of income inequality in the European Union. Its Gini index remains well above the EU average and far higher than countries like Belgium and the Czech Republic, where inequality levels are considerably lower.
If the new measures—estimated to total up to €2 billion—focus primarily on relieving the tax burden of the middle class without introducing equivalent support for the lowest income groups, there is a risk that overall inequality will remain entrenched or even worsen. Currently, the bottom 20% of Greece’s population accounts for just 10.3% of national income. Without targeted interventions to address this disparity, the promise of a more equitable economy may remain out of reach.
