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Mitsotakis Unveils €1.6 Billion Tax Cuts, Rules Out Early Election

The measures are slated for the 2026 budget with rollout in January 2026, financed by stronger growth, a larger primary surplus, and improved tax collection.

Protesters gather during a rally outside Thessaloniki's international trade fair where Prime Minister Kyriakos Mitsotakis delivered a keynote speech, at the northern city of Thessaloniki, Greece, Saturday, Sept. 6, 2025. (AP Photo/Giannis Papanikos)
Greece's Prime Minister Kyriakos Mitsotakis delivers a speech during Thessaloniki's international trade fair, at the northern city of Thessaloniki, Greece, Saturday, Sept. 6, 2025. (AP Photo/Giannis Papanikos)
Greece's Prime Minister Kyriakos Mitsotakis delivers a speech during Thessaloniki's international trade fair, at the northern city of Thessaloniki, Greece, Saturday, Sept. 6, 2025. (AP Photo/Giannis Papanikos)
Greece's Prime Minister Kyriakos Mitsotakis delivers a speech during Thessaloniki's international trade fair, at the northern city of Thessaloniki, Greece, Saturday, Sept. 6, 2025. (AP Photo/Giannis Papanikos)

Overview

  • Most income tax brackets will drop by two percentage points, with zero or lower rates for low‑income young people and larger families, plus a new 39% band for €40,000–€60,000 incomes.
  • The government estimates roughly 4 million beneficiaries, including middle‑income earners, young workers, multi‑child households, and pensioners.
  • Pension increases were announced alongside scrapping a real estate tax in remote areas, a 30% VAT cut for small islands, reduced village property taxes, and housing projects on former army sites.
  • Mitsotakis said the package targets Greece’s low birthrate and stubborn living‑cost pressures, presenting it as a boost to disposable incomes within EU fiscal constraints.
  • Police reported three largely peaceful protests in Thessaloniki with turnout over 16,000, while New Democracy’s poll ratings hover near 22–25% as the prime minister rejects a snap vote and signals interest in a third term.