Incomes in 2021 to top €80 bln

Incomes in 2021 to top €80 bln

}It was back in 2013, with the economy in recession, when the tax administration last recorded a sum of incomes declared by taxpayers above 80 billion euros, concerning 2012. That was followed by the adventure of the third bailout and the pandemic, but in 2022 it appears the €80 billion mark will be cleared.

The target is seen as feasible (concerning this year’s incomes), as the reduction of unemployment and the creation of more and more personal enterprises means there is a clear prospect for the expansion of the tax base.

Besides the economy’s growth rate, the factors contributing to the increase in taxable material will include the interventions in tax policy, such as the increase in online transactions required and the reduction of tax rates, particularly for the self-employed; all this makes tax compliance cheaper for taxpayers, and the risk of hiding taxable material more costly.

Although the IAPR has not yet published the data on the the incomes declared in this year’s tax statements, which will reflect the impact of the pandemic, it is clear that the reduction was smaller than feared in an exceptionally difficult year (2020) with the forced shuttering of hundreds of thousands of enterprises and the suspension of hundreds of thousands of employment contracts.

The 2022 declarations, covering the year that is to end in five weeks’ time, will show a significant increase in incomes for five main reasons.

– The number of furloughs in 2021 was considerably lower than last year, leading to a recovery in taxable material.

– Pensioners enjoyed significant payments of retroactive dues, especially those with more than 30 years of service.

– A number of new businesses were started both in 2020 and in 2021 by the self-employed thanks to the interventions easing costs for entrepreneurs.

– Unemployment has declined significantly in the last few months, which means more people at work and higher incomes from salaries.

– While there was a rental freeze on many commercial assets over the first few months of 2021, since the summer the forced reduction of rental incomes has ceased, as reflected in rent declarations.

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