According to the Greek Government’s plan to reform the social security system, the social security contributions paid by the self-employed will be non-contributory. They will be calculated as a percentage of the income of each self-employed person and on top of this, the resulting difference will not be reciprocated with an equivalent level of mandatory healthcare or pension coverage to the insured, who will not be free to choose the insurance class under which they will fall but are compulsorily placed there. That is why lawyers in Greece have refrained from working since last December. This would be way to introduce a second income tax, which in many cases would be much higher than the usual one and affects the minimum subsistence figure for a decent existence.
The Commission is asked:
1. Does indirectly introducing a second income tax under the name of a social security contribution directly contradict the principle of economic freedom as an expression of personal freedom?
2. Is it allowed, and up to what percentage, to calculate taxes and social security contributions as a whole so as not to affect the minimum subsistence figure for decent existence and the freedoms to conduct business?
3. What stance does the Commission’s representative in the Troika take on this matter?
Answer given by Mr Moscovici on behalf of the Commission
Social security contributions as well as taxes are mandatory in all EU Member States and in general in all countries around the world. Imposing these kinds of levies on the population does not constitute, as a matter of principle, a violation of fundamental rights such as those referred to by the Honourable Member.
One of the objectives of the pension reform voted by the Greek Parliament on 8 May 2016 as part of the first programme review is to broaden and modernise the contribution and pension base for all self-employed, including by switching from notional to actual income, subject to minimum required contribution rules. This change addresses the justifiable concern about the inability of certain professionals to pay fixed amount contributions that do not currently correspond to their actual levels of income. In addition, the law includes a specific provision establishing lower contribution rates for those self-employed professionals who are starting their career, when incomes are typically at their lowest. Moreover, those with low incomes are benefitting from personal income tax credits, which currently guarantee a relatively high level of tax-free personal income.