FINANCE

Tax dues only for two in seven

Tax administration bracing for major reduction in takings from individuals and corporations

tax-dues-only-for-two-in-seven

Just two out of every seven taxpayers will have to pay income tax for their 2020 revenues this year, according to data from the Independent Authority for Public Revenue.

Data analysis shows that 71.81% of the tax clearance slips issued either have zero tax claims from taxpayers or contain tax rebates; this trend is likely to continue for all taxpayers, and the rate of taxpayers with dues to pay could be even smaller.

That is because freelance professionals are now taxed at a starting rate of 9% for the first 10,000 euros of their annual income, they are exempt from the solidarity levy and their corporate income tax deposit has been reduced from 100% to 55%; therefore most of them have either zero tax dues this year or can expect a rebate. At the same time thousands of salary workers had their contracts suspended and obtained the state compensation of €534 per month for long periods.

Under these circumstances the Finance Ministry agencies are this year anticipating that some 1.5 million taxpayers will get a rebate, up from 1.1 million last year, while zero-due tax clearances will also increase. That will lead to a reduction of tax takings from individuals and corporations.

Data also show that taxpayers aren’t very interested in submitting their declarations by July 28 so as to receive the 3% discount if they pay their dues (if any) in a lump sum. Up until Monday just 1.4 million tax declarations had been uploaded, corresponding to 1.95 million clearance slips, while the procedure will be completed with another 5 million declarations that correspond to 8.9 million clearance slips.

This year’s tax payment by individuals may be paid in up to eight monthly installments, with the first due by end-July; however, there is the option of submission by August 27, but that entails the simultaneous payment of the first and the second tranche by August 31, and there is no 3% discount if all dues are paid at once.