Most people earning up to €25,000 ($33,425) a year will see a small decrease in their income tax bill, but everyone above that level will see an increase. Someone earning €35,000, for example, previously paid €7,070 in taxes per year but will now pay €8,050.
Meanwhile, further charges were levied on electricity bills, with households that failed to pay disconnected from the power grid. And another round of tax hikes took effect this year.
That pressure is pushing Greece toward a tipping point at which too many demands placed on a shrinking tax base, argues Savas Robolis, a professor of economics and public policy at Panteion University in Athens and lead researcher at the GSEE union.
According to government data analyzed by the GSEE, 3.6 million people out of a population of 11 million are working, with 1.6 million employed by private-sector companies — that's down from around 2.5 million before the crisis broke in 2010.
"Out of them, about 600,000 are left who still work an eight-hour day and are paid regularly," Robolis says. "The remainder — a million workers — have had their hours cut or are getting paid late, four or five months late. They are in a state of desperation."
"In other words, Greek workers and unemployed people may soon not have enough money left to pay taxes while covering their basic needs. If that happens, it would be the worst possible outcome for the Greek economy and Greek society."
That, he argues, could leave the government unable fully cover its own commitments — including wage and pension payments — causing even greater poverty.
Early signs from 2013, suggest high taxes may be backfiring: January revenues sank €572 million ($765 million) from last year's figure to €4.42 billion ($5.91 billion), despite a raft of additional demands on tax payers.
When contacted by the Associated Press, officials the government's powerful new Department of Public Revenue refused to confirm widespread local media reports that 2.5 million tax payers will be sent notices starting next month demanding overdue payments.
"The question is when the tax capacity is used up ... Up until now, the state has fallen behind on payments to suppliers but it is able to pay wages and salaries," Robolis said.
"But if the situation gets worse I'm not certain it will be able to. If you look at other countries that went through a crisis ... when then they reached a certain point and the state told them they could not pay them, that's when the tension flared up."
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