The reduction in the income tax discount from next year should now be seen as a certainty, and it is destined to hurt most taxpayers, above all those in the lower income brackets. Changes in tax brackets and rates is also quite likely, as the creditors are insisting on changes there as well.
The extent of the tax discount reduction will depend on the size of the measures the creditors demand that the government implement to meet the fiscal targets set for 2018. That is why the Finance Ministry has started making calculations to find out what revenues the state can expect from such a measure.
Despite the pressure coming from the International Monetary Fund for the tax-free threshold to drop from 8,636 euros (for unmarried taxpayers) to 5,000 euros – thereby reducing the tax discount from 1,900 to 1,100 euros – ministry officials say the threshold will come to 7,272 euros, leading to extra revenues of about 1 billion euros for the state coffers.