ECONOMY

Tax changes on the way for self-employed

The self-employed and all pensioners will soon have their income tax deducted automatically from their earnings, something which is already the case for salary workers and many pensioners, as the Finance Ministry and the technical experts of the country’s creditors are working on the introduction of a “pay-as-you-earn” system from January 1, 2015.

This means that as of January the state will withhold the tax from taxpayers’ earnings without having to wait for the submission of tax statements and payment in installments the following year.

Consequently, for many taxpayers, after the processing of their tax declaration there may well be no tax payable given that they will have already paid it during the course of the year.

This process will not only bring forward the payment of income tax due, but is also expected to reduce the rate of new debt creation.

In addition, the government is re-examining the remaining tax exemptions, as it has promised its creditors that it will abolish any that are seen to be inefficient and unfair.