As if to underline its skill at presentation and marketing, the government has repeatedly referred to its proposed reform of the tax regime as a ‘flagship project’ and as ‘emblematic reform.’ But there is nothing emblematic about the proposed changes, the main ones being the raising of the tax threshold by €1,000, increasing corporate tax by 2.5 percentage points and scrapping the defence levy on income from rents; it would also reduce the defence levy on dividend from 17 per cent to five.

These are small changes – tweaks to the taxation system. Apart from emblematic, Finance Minister Makis Keravnos said the reform “was marked by its social dimension,” as it provided relief for families, students, young people and large families. He also repeated the claim about bolstering the middle class – one of the most popular reform related slogans – cited as an illustration of the social dimension of reform.

What the planners of the government did not consider was the possibility that while the reform might help the members of the so-called middle class it would do absolutely nothing for those in the lower classes, such as people on minimum wage. Anyone earning less than €19,000 will have no benefit from the reform while those earning more than €21,000 will see their disposable income increase by a few hundred euros a year. The pay gap between middle and lower class would marginally increase as a result of the reform, with the lowest income earners having no benefit at all.

The talk about the middle class is indicative of the sloppiness and superficiality with which the government approached reform. Who are the members of the middle class that government believes are more deserving of financial support through income tax reform than the lowest earners? It could be argued that the lowest earners are paying no income tax anyway which is why they cannot benefit from reform. The only part of the reform that has a social dimension is tax relief for children, for families with a gross income below €80,000 per year.

This is not tax reform in the real sense because most of the changes being introduced are cosmetic. It is tax reform according to government hype but six bills that the legislature will have to approve are in reality small adjustments to income tax law. It has nothing to do with the tax reform brought about by the Clerides government 22 years ago. In a way it is better that we will be witnessing some small adjustments, that will have no impact on the economy, rather than real reform, which exists only in the government rhetoric.