ECONOMY

New taxes set to eat into incomes

The new year is set to be the toughest yet since the start of the crisis as household incomes will shrink further thanks to the tax measures already planned and the need for more.

Greece?s creditors may have made it clear that they do not want to see any new tax burdens on citizens, but the additional measures for 2012 have already been planned and will eat even further into disposable incomes.

The Finance Ministry expects to receive about 7.3 billion euros from some 5.5 million taxpayers, but even if that amount is indeed cashed in it will not be enough to plug the hole created by the state?s failure to meet the 2011 targets for revenues and expenditures. As a result, an extra 2.5-3 billion euros must be found through extra moves that have not been planned as yet.

So far there are 10 main ways planned to bring in additional revenues for the new year. The first concerns the reduction of the tax-free ceiling from 12,000 to 5,000 euros per year with the simultaneous increase in tax rates for the other brackets, entailing an extra annual burden of 100 to 900 euros. Secondly, the amount of money withheld from monthly salaries will now be calculated based on the new tax-free ceiling.

Some 500,000 taxpayers who had their statements processed in the last few days will have to pay the extraordinary charge for their 2010 incomes. Then there is the payment of the extraordinary charge for 2011 after the statements to be submitted this spring are processed, while the charge on 2012 incomes will be cashed in through the monthly reduction of salaries.

The professional levy on the self-employed and small and medium-sized enterprises will rise from 300 to 500 euros.

About 2.5 million taxpayers will be taxed according to their possessions and not their stated income, up from 1.3 million last year.

Tax exemptions have been drastically cut, while the special consumption tax on heating oil will soar by 40 cents per liter from October 2012.

Property taxes are expected to add up to 4 billion euros this year, through the Single Property Tax (ETAK) for 2009, which is still pending, the Property Tax (that replaced ETAK) for 2010 and 2011, the extra property charge paid via electricity bills and the additional levy on those with property valued at 400,000 euros and over in 2009.