BUSINESS

Finance Ministry monitors tax deadline

SOTIRIS NIKAS

TAGS: Finance, Taxation

The moment of truth has come for the Finance Ministry, as Friday is the deadline for the payment of the first income tax installment and will show the degree of taxpayers’ response to their obligations. Their attitude up to late Friday will be a reliable sign of what can be expected to follow in the rest of the year, when the Greeks must pay taxes adding up to 25 billion euros, including for new measures implemented since June.

The total income tax, payable in three tranches every two months, amounts to 3.6 billion euros. Therefore, by midnight Friday state coffers should receive a total of 1.2 billion euros for this month, to offer the ministry a much-needed cash boost.

In application of the measures agreed last year with the country’s creditors, taxpayers with annual earnings of over 30,000 euros must pay an additional amount on the solidarity levy, while the self-employed and farmers are facing an increased tax deposit for next year from 55 to 75 percent.

Worries about the rate of response by taxpayers’ to their obligations have increased considerably this year, for the additional reason of hikes on indirect taxes that have eaten further into households’ disposable incomes. In the first half of the year taxpayers paid an additional 1.9 billion euros in taxes compared to the same period in 2015, of which 1.6 billion concerned indirect taxes.

There is also concern about the collection rate from the other new charges imposed this year: Friday is also the deadline for the payment of value-added tax by the self-employed for the second quarter and by large corporations for June, the month when the main VAT rate climbed from 23 to 24 percent. The ministry is eager to see whether that VAT hike has actually led to a rise in takings, or to more tax dodging. June also was the first month when the 30 percent VAT discount was abolished for 11 Aegean islands.

End-September will be an even bigger test though, as besides the second income tax tranche deadline, it also marks the deadline for the first tranche of the new Single Property Tax (ENFIA).

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