ECONOMY

Taxation to ease annually for individuals and corporations

taxation-to-ease-annually-for-individuals-and-corporations

It is the intention of Prime Minister Kyriakos Mitsotakis to ease taxes every year from 2019 to 2023, undertaking the obligation to render accounts of its action every year while reserving the right to surprise citizens with the reduction of tax rates earlier than scheduled.

The government’s tax policy for next year will be revealed next month, as the drafting of the major tax bill will also be completed during the period when the first draft budget is tabled in Parliament.

This bill will include the new tax rates for individuals, the lowest being 9 percent for annual takings up to 10,000 euros, with the top rate being reduced from 45 percent today to 42 percent, and a clause forcing taxpayers to make more electronic payments to secure the maximum tax discount.

The Finance Ministry is working hard to determine the new calculation method for the requirements from taxpayers in online transactions while offering more incentives for card use but not compromising the paying capacity of social groups with insufficient access to card terminals and e-banking.

The timetable of the tax easing measures will be shaped according to developments in fundamental economic indexes (such as growth and budget execution), as well as the course of negotiations with the country’s creditors.

The new tax system will contain different brackets as well as rates to the existing one in order to bring about some relief for the middle incomes, albeit in the long term. A competent government official has assured Kathimerini that the restructuring of the system will not result in any taxpayers having to pay more tax than they do today.

The tax bill is also expected to incorporate a clause on amortizations that will help corporations with increased investment activity to reduce their taxable incomes, and therefore their tax dues. This measure, along with the reduction of the corporate tax rate from 28 to 24 percent in 2020, and gradually to 20 percent, is expected to bolster investments. The reduction of the corporate tax rate alone will release resources of 690 million euros in the first phase of the tax rate reduction (2020), and an additional 500 million euros in the second year.