Vicious cycle of overtaxation sees state getting less in income tax

Vicious cycle of overtaxation sees state getting less in income tax

While the process for the submission of income tax declarations was completed on Monday and Tuesday is the deadline for the first installment, all signs point to revenues being about half a billion euros less than last year.

Provisional figures as well as estimates by Finance Ministry officials suggest that the processing of tax statements for 2017 incomes will lead to tax takings trailing last year’s by 400-500 million euros.

Based on the data published to date, it appears that income taxes imposed on taxpayers and businesses add up to 2.8 billion euros, against a final amount of 3.5 billion euros last year. The Finance Ministry officials note that the amount for this year will not exceed 3.1 billion euros, given that there are only 150,000 declarations left to process.

Major tax consultancy agencies say that the difference this year is due to the reduction of self-employed professionals’ incomes. This in turn is the result of the deduction of the social security contributions from their earnings, which brings down their taxable incomes and therefore the state’s tax revenues. The drop revenues can be partly blamed on tax evasion, which has increased because of the high tax rates and heavy social security contributions.

Statistics up until Monday showed 6,091,880 declarations had been uploaded on Taxisnet. Just over two-fifths of them (40.63 percent) will require the payment of extra tax for revenues received in 2017, averaging at 1,277 euros per person, including the solidarity levy, the stamp duty for performing a profession, and the tax deposit for the following year, if applicable.

Taxpayers who failed to submit their declarations by midnight last night face a fine ranging from 100 to 500 euros each.

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