New tax burdens worth €10.7 billion will be imposed on households and businesses over the next four years, while support measures are insufficient to offset the pressure that inflation exerts on incomes.
Employees will see tax reduction measures reflected in their paychecks from January 2026 through lower tax withholding, while self-employed professionals will see relief in spring 2027 with their tax return settlement.
Heavier tax burden until 2029: Additional €10.7 billion for households and businesses
The Multi-Year Fiscal Plan 2026–2029, presented yesterday to the Cabinet, forecasts a surge in revenues from income taxes, VAT and property taxes to €81.8 billion by 2029, from €71.1 billion this year, translating to over €2 billion in additional taxes annually.
VAT revenues alone over the four-year period will rise to €31.4 billion from €25.6 billion in 2025, an increase of €5.7 billion. Meanwhile, a steep rise is expected in income taxes for individuals and corporations, reaching €33.029 billion in 2029 from €26.8 billion this year, marking a €6.2 billion increase.
While the additional burden stems from natural income maturation, tax compliance enhancement measures (POS–cash register integration, MyDATA, electronic invoices), inflation that “inflates“ VAT revenues and improved business profitability, benefits for workers are not increasing at a corresponding rate.
According to the multi-year fiscal programming, these benefits will increase by only €2.1 billion, reaching €27.5 billion in 2029 from €25.4 billion in 2025.
The four-year tax roadmap
Analysis of direct and indirect taxation revenue data reveals the following:
Income taxes: The evolution of income tax is particularly interesting, showing significant strengthening: From €26.8 billion in 2025 to €32.7 billion in 2029. The rise in income tax revenues is mainly due to expanded economic activity and more effective collection.
Specifically:
- Personal income tax increases gradually, from €15.8 billion to €18.6 billion by 2029, reflecting wage increases and stable employment.
- Corporate income tax increases from €7.9 billion in 2024 to €11.2 billion in 2029, confirming improved business profitability.
Consumption taxes and VAT: VAT and special consumption taxes remain consistently the strongest sources of tax revenue, rising from €36.9 billion in 2025 to an expected €43.6 billion in 2029. VAT alone increases from €25.6 billion to €31.4 billion, confirming that inflation continues to fuel government revenues. Meanwhile, special consumption taxes remain almost unchanged, moving between €7.4 and €7.6 billion annually.
Property taxes: Regular property taxes show a mild declining trend, dropping from €2.41 billion in 2025 to €2.26 billion in 2029. This reduction reflects interventions to address the housing crisis as well as the gradual abolition of ENFIA in settlements up to 1,500 inhabitants.
From 2026, the new tax scale will take effect, providing:
1. Reduction of tax rates by 2% for incomes from €10,000 to €40,000.
Specifically, tax rates are reduced:
- from 22% to 20% for income between €10,000 – €20,000,
- from 28% to 26% for income between €20,000 – €30,000 and
- from 36% to 34% for income between €30,000 – €40,000,
2. Introduction of a new 39% rate for incomes between €40,000 and €60,000.
The rate for income from €10,000 to €20,000, now at 20% for taxpayers without children, is further reduced according to the number of children and even more for families with three children to:
- 18% for taxpayers with 1 dependent child,
- 16% for taxpayers with 2 dependent children and
- 9% for taxpayers with 3 dependent children,
For large families, greater rate reductions are provided and specifically, for families with four or more children, tax on incomes up to €20,000 is eliminated,
3. The rate for income from €20,000 to €30,000, now at 26% for taxpayers without children, is also reduced by 2 percentage points for each child, regardless of the number of children:
- 24% for taxpayers with 1 dependent child,
- 22% for taxpayers with 2 dependent children,
- 20% for taxpayers with 3 dependent children,
- 18% for taxpayers with 4 dependent children and
- 16% for taxpayers with 5 dependent children etc.
Tax elimination for incomes up to €20,000 for young people aged up to 25 years and setting at 9% the rate for income from €10,000 to €20,000 for young people aged 26 to 30 years.
