The overhaul moves away from the current model, where tax breaks are applied uniformly and all taxpayers receive the same benefit regardless of income. Instead, the redesigned framework will tie relief to family circumstances, giving priority to households with children and replacing blanket deductions with more targeted support.
For the 3.5 million employees and pensioners in Greece who actually pay income tax, the changes will be felt immediately. From the first paychecks and pension payments of 2026, reduced tax withholdings will apply. The reform, however, will not reach everyone. More than half of Greek taxpayers already pay no income tax at all, and according to last year’s figures, 55 percent of tax returns came from citizens who contributed only three percent of total income tax revenue. For them, the reform will make no practical difference. Among those who will benefit, around 20 percent are taxpayers with dependent children, while the majority are single adults or couples without children.
The gains, however, will not be permanent. The reason lies in the lack of indexation in the tax brackets. As wages and pensions rise nominally due to inflation, the tax thresholds remain fixed. Over time, more taxpayers are pushed into higher brackets, steadily eroding the relief initially provided.
Take, for instance, a salaried worker earning a net monthly income of €1,500 in 2026. With 14 salary payments a year, their annual income reaches €21,000. Under the new scale, their annual tax burden could fall by about €300. But just one year later, with a modest 3 percent raise lifting their income to €21,600, the benefit might shrink to €220–250. By 2028, with another inflation-driven increase bringing annual income to €22,250, the relief could dwindle further, leaving just €150–180 in savings per year.
The government is betting on the strong initial impact of the reform, which will be visible immediately in 2026. Yet without adjustments to keep pace with inflation, the advantage is expected to gradually disappear, leaving taxpayers with far smaller gains than they first experienced.
