Posted by
keeptalkinggreece
in Society
I am so
glad that somebody sat down and summarized what KTG has been reporting about
for the last three years. Τhat is all the reporting about taxes and more taxes,
and regular and emergency taxes that become permanent taxes. Not to forget the
social security contributions and the income taxation based on fictitious
income the finance ministry calculates but the taxpayer does not have.
In the
article below, journalist Thanos Tsirou calculates how much an employee
gets in his pocket after taxes and social security contributions are subtracted
from his salary. Furthermore, the journalist of daily Kathimerini adds utility expenses and comes down to
the shocking amount of 500 euro, an employee has in month to cover other
personal needs like food and clothing.
Tsirou
takes as example the ideal -and almost utopic – Greek employee of the private
sector, who has a very well-paid job with 1,500 euro gross per month and gets
his salary in time.
How one
salary perishes
In the
following example of a well-paid employee of 1.500 € gross, taxes and social
security contributions reach 880 euro!
With
gross monthly salary of 1,500 euros , the protagonist of the story is
considered lucky if he has a job and the employer pays on time.
I would
never have guessed that from these earnings – very “juicy” for the current
circumstances -, about 60 % land in one way or another in the state treasury.
Income
tax , social security contributions, solidarity levy , property ownership tax ,
road tax , special consumption taxes for basic items and Value Added Tax.
Of
course, everyone in Europe is exposed to these kind of taxes. However Greeks
pay almost the highest rate.
The
benefits and services we receive by the state in return of high taxes are …
well… not worth mentioning…
We suffer
the higher deductions from our salary , we have the third highest VAT in Europe
and the largest tax on heating oil , paying special consumption tax for
electricity and mobile phones, while a special ‘possession’ tax has been
imposed on vehicles and properties.
The
result is according to what the hero of our example says, one of the
hundreds of thousands of representatives of the so-called “middle class” .
The
monthly salary of 1,500 euros exists only on paper.
The
example is very descriptive:
The
employer automatically withholds 248 euros for the social insurance
contribution from the side of employee. Also withheld are 126 euros for income
tax and 13 euros for solidarity levy , which was introduced as a temporary
measure , but it will become permanent. Net earnings come down to 1,116 euros.
Gross
€1,500 – €248 social insurance – €126 income tax – €13 solidarity levy =
€1,116 net
The
employee, resident of a middle class suburb in Athens (Chalandri), lives in a
120 sqm apartment, built five years ago. For every square meter he pays 6.5
euro ‘ownership tax’ or ‘emergency property tax‘ that was introduced in
2011 as temporary tax but became permanent. The employee pays 780 euro annually
for this tax, which is 65 euro per month.
€
1,116 – € 65 = € 1,051
The man
has a 1600cc vehicle for which he pays 265 euro annually as road tax.
That is 22 euro per month. he travels 15,000km per year, for which he consumes
1,200 liters of gasoline. The tax per liter reaches about one euro (
consumption tax and VAT), meaning that the fuel tax is charged 100 euros per
month.
€
1,051 – €22 – €70 = € 952
Heating for 3 winter months: For the
120-sqm-apartment, the employee needs approximately 1,200 liter of heating oil.
With purchase price at 1.28 euro per liter (0.57 euro tax), he pays 1,500 euro
to the heating oil supplier at the beginning of the heating season, in
November. €684 is tax (57 euro per month in tax). For 3-4 months of
heating, the cost for the heating oil spread over the year is 125 euro per
month.
€
952 – €125 = € 827
Electricity consumption is some 1,200 KWh
per quarter. The pure electricity consumption cost is 115 euro for 3 months,
but it jumps up to 300 due to municipality fees and taxes, emergency property
tax installment, VAT, consumption taxes and various charges for electricity
transmission, utility services and gas emissions. The sum of taxe sin
electricity bill is some 185 euro per quarter and 46 euro per month. Monthly
bill is therefore 100 euro.
€
827 - €100 = € 727
The
little extra in life: One package of cigarettes per day makes an
expenditure of 114 euro per month (of which 92 euro are taxes), the use of mobile
phone deducts further 40 euro form the wage (11.33 euro tax and VAT).
€
727 – €114 – €40 = € 573
After
decucting all the above, the employee has 573 euro available to cover
his needs in food, clothing, footwear, other utilities like water and for
apartment building fees, tutorials for kids, cleaning material, entertainment.
all these extra needs are subject to 13% and 23% VAT, which means the Tax
Office receives about 100 euro per month in extra tax.
A family
of four would need at least 80-100 euro per week for food and other
daily life needs. A single household could come up with minimum 50 euro for
food only.
What is
left from the 1,500 euro gross salary at the end of the month? A nice nothing.
But the
state has cashed €532 in taxes – the social insurance amount excluded.
(full
article with more details in Greek here)
What does
the taxpaying employee received for all these taxes he has paid to the state? A
demolished health care system, an education with lots of holes and standing
line up to 3 hours for public services, just to mention a few.
You can
very well imagine the other case of an employee earning below 1,000 euro per
month, in the average 500-700 euro for new hiring, and in addition has to
anticipate for several months to get paid, while the monthly expenses slide
through his fingers.
Correction:
KTG had
earlier written by mistake “a family of four would need at least 80-100 euro
per month for food and other daily life needs”. Of course, I don’t know any
super super market feeding a family with 80-100 euro per month. Correct is : “a
family of four would need at least 80-100 euro per week for food…”
Apologies.
- See
more at: http://www.keeptalkinggreece.com/2013/11/11/taxes-and-more-taxes-swallow-greek-employees-wages/#sthash.gFGct3dg.dpuf
No comments:
Post a Comment