ECONOMY

Separate set of rates for solidarity levy

separate-set-of-rates-for-solidarity-levy

Incomes earned in 2016 will be taxed with a double set of tax rates, according to plans drawn up by the Finance Ministry.

The first set of rates will resemble what currently applies, at 22 percent, 32 percent and 42 percent, as well as an additional rate of 50 percent for incomes in excess of 60,000 euros per year. The second set is new and concerns the change in the way the so-called solidarity levy is calculated.

The government is against incorporating the solidarity levy in the main set of rates, as the bailout agreement dictates, due to fears of pressure from taxpayers and opposition parties, as that would render an extraordinary tax permanent.

The supplementary set of rates will now calculate the solidarity levy based not on the entire annual income but on a specific section of it, as is the case in the main income tax, though without a tax-free threshold and with a top rate of 10 percent for annual incomes of more than 500,000 euros, up from the existing 8 percent rate.

A government official told Kathimerini that this plan has been submitted to the country’s creditors, without any response so far. The plan would create a small hole in the budget, estimated at some 50 million euros, compared with the full incorporation of the solidarity levy in the income tax.