ECONOMY

Tax burden to get bigger in June

The new tax bill, which is not expected before June, is set to be based on a report issued by the International Monetary Fund and will include such reforms as the use of a flat value-added tax rate and an increase in indirect taxes, leading to an additional burden on taxpayers.

The report, prepared by the technical mission of the IMF, also included an end to the tax-free ceiling of 5,000 euros per year and the separate taxation of profits from real estate with a 20 percent rate.

The reforms are coming during a period when households are finding it increasingly difficult to serve their obligations to the tax authorities while Finance Ministry officials concede that there has been an increase in outstanding debts due to the financial crisis.

The parties participating in the consultation process ahead of the drafting of the bill agree with most of the IMF recommendations, but not the abolition of the tax-free threshold and the increase in indirect taxes. In any case the reforms to be executed by the next government, to emerge from the spring elections, will need to obtain the approval of the country?s official creditors first.

Other measures proposed by the IMF and examined during the consultation process include the following: the reduction of income tax brackets from eight to just three or four, the increase in bond and deposit interest rate tax from 10 to 20 percent, the abolition of tax exemption for arable land owned by taxpayers, the end to each finance minister?s ability to revise official property values when he wants with the introduction of annual revisions, the abolition of reduced VAT rates on eastern Aegean islands, and the imposition of a set special consumption tax on wine and on rolling tobacco.