BUSINESS

Gov’t working towards a new tax-free ceiling to determine the future rates and brackets

PROKOPIS HATZINIKOLAOU

TAGS: Taxation

A new set of tax rates is being drafted at the State General Accounting Office, as the income tax overhaul will apparently concern more than just the tax-free threshold.

Sources say that the options on the table concern setting the tax-free ceiling at 7,000 euros (or even lower) per year, against 8,636 euros today. Depending on the figures that stem from projections of the resulting tax discount, officials will adjust the tax rates and brackets. If the ceiling is set at 7,000 euros, some 550,000 salaried workers and pensioners will have to start paying income tax.

What is not yet known is whether the government is planning those changes based on the recommendations of the International Monetary Fund, which has demanded the adjustment of the tax-free ceiling to the average level in the eurozone.

According to the IMF, such a move would allow some scope for the reduction of corporate tax by up to 10 percentage points from the current level of 29 percent, and of income tax for taxpayers to between 15 percent and 20 percent, from the current range from 22 to 45 percent.

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