Tax overhaul to apply from 2013

A new tax bill is expected to be tabled in Parliament in September. It will herald changes to income tax and introduce an assets register that will be in effect from the start of 2013, Deputy Finance Minister Giorgos Mavraganis said on Wednesday.

However, he added that if negotiations with Greece?s creditors regarding the reduction of the value-added tax rate on food catering bear fruit, the cut will be fast-tracked through Parliament for its immediate implementation.

Among the changes that the government is considering are a rise in the tax-free threshold from 5,000 to 8,000 euros per year and the reduction of income tax brackets from nine to either four or five, in order to help lower income groups, Mavraganis said.

The current procedure whereby taxpayers have to submit purchase and services receipts with their declarations will be reviewed, Mavraganis said, as it has not helped in the battle against tax evasion as much as expected. Tax exemptions based on income and social and demographic criteria will also be reassessed, while an electronic register of assets — for real estate and other holdings taxpayers have in Greece and abroad — will operate within 2013, though it is unlikely it will be ready at the start of the year.

Taxpayers who submit their declarations on time this year — by Monday as far as electronic submissions are concerned — will meanwhile be able to pay their income tax in seven to 10 installments, if they fulfill the social criteria the bill will set.

The special property tax will be paid in five installments and will not be tagged on to electricity bills, as was the case last year, though Public Power Corporation may still print and send the pay notices. This is supposed to be the last year that this tax — which is budgeted to fetch 2.5 billion euros — will be paid separately, as the government intends to merge all property taxes into one as of next year.

Mavraganis also announced there will be no changes to the so-called ?objective values? — i.e. the real estate prices used for tax purposes — given that in a great number of cases these are now on a par with market prices.

He added that the tax system needs an even greater overhaul, as it is still a long way from the modern tax systems of other countries.

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