NEWS

Tax-free threshold could be scrapped

Public officials are to spend the next few days crunching numbers in order to provide the government, which is steeling itself for stronger opposition to the latest austerity package, with the potential savings from scrapping the 5,000-euro income tax-free threshold.

The Finance Minister has asked officials to provide details on how specific income groups, such as pensioners, freelancers and farmers, would be affected by the move. Greece?s tax-free ceiling was reduced from 12,000 euros last year. At that time, of 779,319 self-employed and freelancers, 457,386 declared an income of less than 12,000 euros per year.

It is estimated that if Greece scraps the threshold altogether, as the International Monetary Fund has proposed, the government would raise an extra 1.5 billion euros per year. The coalition has the option of applying the measure to this year?s incomes, which have yet to be taxed, not just next year?s.

The IMF has proposed the creation of four income tax brackets as part of an overhaul of the taxation system. Anyone earning up to 22,000 euros would be taxed at 18 percent, those making 22,000 to 45,000 at 35 percent, those with incomes of 45,000 to 100,000 would pay 40 percent in tax and anyone making more than 100,000 euros would be taxed at 45 percent.

PASOK leader Evangelos Venizelos is due to brief all of his party bodies about the latest developments on Tuesday. All three coalition leaders are concerned about unrest within their parties due to the unpopularity of the measures. Venizelos hopes that next week?s briefing will help avert any possible rebellion within PASOK.

Alexis Tsipras, the leader of leftist opposition party SYRIZA, is expected to attack the measures during a speech at Thessaloniki International Fair today. It will be Tsipras?s first major address since the party?s impressive showing in June?s general elections.

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