New tax bill to hurt households

The new tax bill that Kathimerini can unveil includes radical changes in the taxation of salary workers, pensioners, the self-employed and companies. However, the changes will apply from next year and not retrospectively for 2012 incomes.

The system, which will soon be presented to Parliament?s Finance Committee, will abolish most tax exemptions, set a ceiling on exempted expenditures related to healthcare and consider all benefits as revenues from salary services.

The same bill will determine the rates for the taxation of interest rates from all kinds of securities such as share transfers. In total, the government is expecting an additional 2.5 to 3 billion euros to come into the state coffers in the next couple of years from taxes.

For salary workers and pensioners, tax brackets will remain the same for 2013 incomes: The eight brackets will stay, along with the 5,000-euro per year tax-free ceiling. However, the tax-free bonus for families with children will be abolished, entailing additional tax for most households. Most social benefits will be considered as additions to salaries and pensions and be taxed likewise; up until today they had been exempt from tax.

Although the self-employed will be taxed at a flat 28 percent rate, just like companies, some of them could enter the salary workers? brackets provided a number of conditions are fulfilled.

The only tax exemptions to survive the cut will be those for visits to doctors, hospital care and life insurance policies, alimony payments and social security contributions.

As far as corporate tax is concerned, also applying to the self-employed, the biggest change is the end to the tax-free threshold of 5,000 euros per year. Corporate income will be taxed from the first euro as of 2013. The government is still considering to abolish the annual fee to practice a profession for the self-employed and for one-person companies.

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