By Prokopis Hatzinikolaou
The Finance Ministry has been forced by the country’s creditors to do a U-turn and retain the measure of receipt collection in its effort in order to beat tax evasion. As a result, salary workers and pensioners will have to collect and hold onto the receipts from their retail purchases next year too.
The measure next year will not be linked to a tax-free level as that is to be abolished; instead, receipt collection will be used for taxpayers to secure a tax deduction starting from 1,950 euros for annual incomes of 18,000 euros and decreasing gradually for higher incomes. As a result, the discount will go down by 50 euros per 1,000 euros of yearly income above 18,000 euros, and then by 100 euros per 1,000 euros of annual income over 29,000 euros.
Just like this year, taxpayers will have to collect a sum in receipts that equals a quarter of their annual income to get the 1,950-euro tax discount, but in case they fail to get that amount their discount will decrease. The tax penalty imposed on them will equal to 10 percent of the difference between the value of the receipts collected and 25 percent of their income.
Notably, those who are not entitled to a tax discount because their annual income exceeds the threshold of 48,000 euros will also have to pay a 10 percent penalty on the difference between the amount collected and 25 percent of their income if they fail to match them. The penalty amount will appear on their tax invoice.
Sources said that the representatives of Greece’s creditors insisted on the measure of receipt collection being retained as they saw no progress in the battle against tax evasion.
The draft tax law is expected to be tabled in Parliament by the end of the month. It will include the creation of a new income tax system with three brackets and no tax-free level.
The first bracket will be up to 26,000 euros per year with a rate of 21 percent, the second will be for incomes from 26,001 to 48,000 euros with a rate of 36 percent and the third one, for incomes over 48,000 euros, will be taxed at a 45 percent rate.
Tax-free levels for people with children and the majority of tax exemptions will be abolished.