ECONOMY

Finance Ministry to clarify use of card payments for tax-free sum

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Next time you go to a bar or cafe, don’t forget to take your credit or debit card, because cash transactions for payments ranging from food and drinks to private school fees and from utilities to gas stations no longer count toward attaining your annual tax-free exemption, according to the Finance Ministry.

In the next few days the ministry will table in Parliament the regulations that will clarify the status of online payments toward the sum to be exempted from income tax. Alternate Finance Minister Tryfon Alexiadis said all receipts for card payments will be taken into account, including utility bills and supermarket shopping, with the exception of expenses declared otherwise, such as rent and medical expenditure.

“We want everything to be conducted through the banking system, everything that is included in the income tax statement,” Alexiadis told Real FM radio on Monday.

The fact that more receipts will now be acknowledged by the state, such as those for utility bills, means that the ministry will likely demand a higher percentage of total income in receipts. For example, Alexiadis mentioned yesterday that a taxpayer with an annual income of 25,000 euros will have to produce receipts through banks adding up to 9,500 euros, or 38 percent of their income. Taxpayers with incomes of 8,000 euros per year will have to produce bank receipts of 4,000 euros, or 50 percent of their income.

For the system to become fully operational, the ministry will need to resolve a number of issues by the end of the month. The bill to be tabled may well exempt from the compulsory use of credit and debit cards pensioners aged 75 or over as well as the inhabitants of remote areas who do not have access to the Internet or stores with card terminals.

Another problem is that a great many enterprises have no card terminals, even in large cities, with ministry officials saying that competition will force them to adapt and install point of sale (PoS) terminals as clients will demand them.

Furthermore, the commission charged by banks for the processing of card payments remains particularly high. Sources say that the ministry has been in contact with the Hellenic Bank Association for the charges imposed at least on small and medium-sized enterprises to be lowered. The same sources add that a number of employer associations have also contacted and reached agreements with the credit institutions on this issue.