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Another change in the tax law seems to be the bone of contention between the coalition partners in the Greek government. Local media report that households with an annual income of up to 25 thousand euro will pay tax at a rate of 45%, which has caused violent clashes in the public domain. The information was incorrect and Finance Minister Yiannis Stournars had to make a series of public statements to appease the spirits. Prime Minister Antonis Samaras himself said that a 45% tax on the income of the middle class was against his beliefs and the ideology he followed and even insisted that the new tax plan would be in favour of pensioners and average and low-paid employees.

However, Greeks will be spared another tax increase this year. However, Greeks will be spared another tax increase this year. According to the latest official information, people with an annual income of up to 25 thousand euro will pay in 2013 income tax of 21%. Those who have a total annual income of 25-48 thousand euro will pay 36% on it and people with an annual income higher than 48 thousand euro will pay 

The government is considering the option of making tax breaks of 1,950 euro for an annual income of up to 18 thousand euro. The breaks for incomes above this amount and up to 29 thousand euro per year will be lower and citizens with an annual income of over 48 thousand euro will not be entitled to tax breaks.

At the same time, the government has significantly cut child benefits. The focus is primarily on families with lower incomes rather than on large families as before. Yiannis Stournaras noted that for years, Greece has been paying more than the average in Europe to maintain a good social policy, but poverty has remained unchanged. This, according to him, is due to the poor allocation of funds for social assistance.

The changes in social policy that have occurred after the adoption of the fiscal plan are in favour of low-income households. In previous years, a significant part of the aids went to large families regardless of the level of their annual income. Households with higher incomes were entitled to higher child benefits, which significantly increased their monthly salaries.

Stournaras’ plan has now changed this policy and families with even one child are entitled to social benefits if their annual income is below the poverty line. It is set at 7,178 euro per person or 15 thousand euro annual family income. According to the latest data of the National Statistics, 20% of the population lives below the poverty line. This means that this group includes about 870 households or 2.2 million Greeks.
 
Tax policy problems have not yet been resolved but the country has no time to waste. The new tax rates are to be voted on and adopted by 11 December this year, as this is one of the conditions set by Greece’s foreign lenders from Europe and the International Monetary Fund in order to grant the 34.4 billion euro aid on 13 December.

The two coalition partners in the government, PASOK and Democratic Left, oppose the taxation of the income below the poverty line and want tax breaks for large families and young entrepreneurs. According to Yiannis Stournaras, their intentions might be noble but the country has no money to compensate those tax breaks at present. Another meeting of the Minister of Finance with the leaders of coalition parties is expected to take place on Thursday in order to reach a common agreement and to submit the law to parliament for voting.

Stournaras has a plan for mastering the problem of tax evasion, which is widespread in Greece, mainly in the liberalized professions - lawyers, doctors, builders, traders and other businessmen. He believes that the problem is rooted in the sense of impunity. In his opinion, if Greece introduces a fast-track procedure of serving when undeclared income is proven, the phenomenon of "tax evasion" will quickly diminish. The Finance Minister said that a bill was being prepared in collaboration with the Ministry of Justice to ensure the rapid completion of such cases. He did not fix the time when this measure would enter into force and so, local analysts remain sceptical of the idea that the fight against tax unfairness will soon bear fruits.