In meetings to be held this week—at least two with the government’s financial staff and communications team—the announcements by Prime Minister Kyriakos Mitsotakis are expected to be finalized, ahead of his appearance at the Thessaloniki International Fair (TIF).

At the heart of Mitsotakis’ presence at this year’s TIF will be the middle class, and in particular salaried workers, who see their disposable income being eaten away both by the high cost of living and by unchanging direct tax rates.

“The primary surplus for the January–July period is €1.2 billion above our target. Our principle is that surpluses should be returned to citizens, and every available fiscal space will be used for the benefit of society,” said the Prime Minister on Sunday in his weekly review—essentially pointing to the package the government is preparing for TIF.

Today, Monday, Finance Ministry spokesman Omiros Tsapalos reiterated in an interview with ERTNews that “the base we are discussing is €1.5 billion,” adding that the goal is for the measures to be permanent and fair, far from one-off handout logic, with emphasis on tax cuts.

More specifically, Mr. Tsapalos noted that the middle class is defined as those earning between €20,000 and €50,000 annually, and that changes in the direct taxation brackets are considered one of the strongest scenarios. If implemented, they would have an immediate impact on salaried workers and pensioners through smaller tax withholdings starting January 2026.

At the same time, measures are expected for the housing issue, with continuation and reinforcement of existing programs, while it was confirmed that rent rebates will be activated in November. At TIF, the Prime Minister will announce additional measures for households that spend a large portion of their income on rent. Particular emphasis will also be placed on the demographic issue, with targeted incentives within the framework of development policy.

Closing
According to Proto Thema sources, families with children should expect substantial relief, given the major and worsening demographic problem facing the country. The more children (dependents) a family has (single-parent or otherwise), the greater the tax reduction they will enjoy—starting from the first child. There is a likelihood that large families, i.e., with four children, may end up paying no tax at all. As competent sources explain, the government wants to shift from the logic that children are a “living-expense imputation” to the logic that children are grounds for tax relief.

As Proto Thema has reported, the flagship announcements will be major interventions in the tax brackets: introducing more rates and lowering the existing ones. A government source speaking to Proto Thema described this as the largest tax cut in history for the middle class. Relevant Minister Kyriakos Pierrakakis and Deputy Minister Thanos Petralias have been working for the past two months on alternative scenarios—all within the spirit of tax cuts targeting families—so they can be approved by Mr. Mitsotakis within the next ten days.

Pensioners are also in the Prime Minister’s sights, as the abolition of the “personal difference” has been locked in, along with rent subsidies. The government team is also focusing on young people, where ND’s polling numbers have been consistently low. Meanwhile, despite the focus on direct taxes, there are also proposals for selective interventions in indirect taxation.

Changes with immediate impact through reduced tax withholding
The upcoming tax changes expected to be announced by the Prime Minister at TIF were discussed today by tax expert Philothei Makridaki in an interview with ERTNews.

She said: “Some information has already been released regarding the changes, and of course they are based both on the results of this year’s tax returns and on the general course of the economy in recent times.

So, in order to grant some tax relief, the new tax system will initially change by introducing adjustments in the tax brackets. These changes will naturally affect salaried employees, pensioners, farmers, and professionals. We should stress here that the tax brackets have remained unchanged since 2020. Therefore, as you can understand, any change downward will always be favorable given the current circumstances.

At present, for income brackets, the tax rate that applies to salaries, pensions, and business activity is: up to €10,000 at 9% (with 4% for the first years for new professionals), from €10,001 to €20,000 at 22%, from €20,001 to €30,000 at 28%, from €30,001 to €40,000 at 36%, and over €40,000 essentially at 44%. As you can see, half of the income goes back to the state.

Now we come to the important change we are expecting for incomes. It may not be exactly as we describe it right now—there could be slight adjustments—but I believe any changes will likely be even more positive, to help the economy further.

We expect a split into two different brackets, with one expected to reach 15%. This will be very favorable. What will this mean, for example, for salaried employees? The amount of tax withheld will decrease. So, essentially, every month each employee will see more money in their pocket.

Subsequently, the changes will affect income starting from 2026, since by 2025 withholding will already have been adjusted. Salaried employees and pensioners will have lower withholding tax. Net earnings will increase, and self-employed professionals will also see the benefit in their tax returns.”

She continued: “The reduced withholding for salaried employees and pensioners will be evident during the year, since each month it will be smaller. Later, of course, the self-employed will also benefit once the tax brackets are lowered.”