Tax policy clash over rising indirect taxes versus direct tax cuts in Greece

According to OECD figures, Greece’s tax receipts from goods and services consistently exceed those from income, profits and capital gains, and the disparity has grown over time. One outlet budget continues this trend, projecting higher collections from indirect taxes while reducing direct tax rates for high-income individuals and valuable real estate. Critics contend that consumption taxes, such as VAT and fuel excise, affect all consumers equally, hitting poorer families harder because they spend a larger portion of their earnings on everyday items.

They also note that recent VAT reductions on certain islands were fully reflected in retail prices, contradicting the government’s claim that such cuts would not be passed on. The administration maintains that cutting indirect taxes would impose a significant fiscal burden and lacks assurance of price transmission to consumers.