BUSINESS

Tax exemptions set to be axed

PROKOPIS HATZINIKOLAOU

TAGS: Taxation, Finance

The government is putting the few tax exemptions left in the country’s taxation legislation on the negotiation table with its creditors in a bid to cover the fiscal gap of 2018 and the following years.

The quest for an additional 700 million euros in revenues for next year’s budget is focusing on slashing tax exemptions further, such those for medical expenses, the heating oil allowance and discounts on the Single Property Tax (ENFIA).

For the 2019 budget, the proposal tabled by the creditors provides for a reduction of the tax-free threshold, perhaps the most important of the remaining exemptions. In any case, the abolition or reduction of any of the existing exemptions will only add to the taxpayers’ burden, particularly those on lower incomes and pensioners.

- Medical expenditure: Some 1.9 million taxpayers make use of this exemption that costs the Greek state about 120.6 million euros per year.
- Seamen’s taxation: The government is considering abolishing or amending seamen’s special tax status, as the tax discounts that 27,318 seafarers enjoy set the state back a combined 91.2 million euros per annum.
- Heating oil: The sum of the allowance granted to low-income households has been cut by 50 percent since last winter and is due to be slashed further next year.
- Tax withheld: The income tax withheld from salaries each month bears a 1.5 percent discount. This adds up to 67.9 million euros per year and concerns 2.9 million salary workers.
- ENFIA: Property owners who can prove they cannot afford to pay the full tax get a discount of 50 percent or even a full exemption. This costs the state about 107 million euros a year.

In total tax exemptions amount to 3.5 billion euros per annum. For households they come to 388.7 million euros, for enterprises 700 million, the registration tax exemption comes to 105 million, the value-added tax exemptions to 1.1 billion and the exemptions to the special consumption taxes reach 1.1 billion euros.

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