File photo.
The government is bringing back to the table one of the key tools for boosting the economy’s competitiveness: reducing non-salary costs.
In the package of measures that the economic staff is preparing for this September’s Thessaloniki International Fair, a new cut in social security contributions for employers is at the heart of the package, which – according to current estimates – will range between 0.5% and 1% and will come into effect on January 1, 2027.
The measure is not simply seen as another tax or social security relief. The government sees it as an intervention with a dual objective: on the one hand, to further reduce labor costs for businesses, and on the other hand, to create room for salary increases, mainly in the private sector, where pressures for better wages are intensifying as the economy grows and unemployment declines.
The extent of the reduction will depend almost exclusively on the available fiscal space that will have been created by the summer of 2026. The main source of funding the Finance Ministry sees is additional revenue from the fight against tax and contribution evasion. The contributions of working pensioners have also helped.
