ECONOMY

Timetable set for tax interventions

Alternate Finance Minister Nadia Valavani on Tuesday set a time frame for certain key policy moves in taxation that the government has already announced, while reiterating the prime minister’s plea for taxpayers to pay their dues to the state.

Speaking in Parliament, Valavani announced that the new tax rates will apply for 2015 incomes, which will also see the reinstatement of the tax-free threshold at 12,000 euros for annual incomes. Although the brackets and the tax rates have not yet been announced, the minister stated that the tax burden will be passed on to those with higher incomes.

The fact that tax brackets will be set in the second half of this year will probably mean that taxpayers – even those expected to benefit from the new rates – won’t see any changes to the tax automatically deducted from their salaries and pensions during 2015. The fiscal burden will be transferred to 2016, after the processing of income tax declarations and when additional amounts deducted from incomes this year will be returned.

Valavani also announced that objective property values (used by the state for tax purposes) will be revised by June 2015 in order to adjust to the going market rates. The single property tax, or ENFIA, will be replaced by the large property tax (FMAP), but main residences will be exempt except in the case of luxurious homes.

Valavani did not clarify how the new tax rates would be applied, given that they will not be introduced before the second half of the year, or how FMAP will be imposed – i.e. what threshold and taxable properties will be included.

Like Prime Minister Alexis Tsipras before her, the minister urged taxpayers to pay their February installments of the 2014 ENFIA (the last one for the old tax), as well as the January tranche in the case of those who have not paid it. She went as far as to plead that taxpayers “try to pay it even if you cannot.”

Valavani further asked taxpayers with outstanding debts to the state to enter the existing 100-installment payment scheme, which the government has pledged to abolish, until the new one is introduced.