Tax cut 5-10 pct if paid at once

Tax cut 5-10 pct if paid at once

Tax breaks, the settlement of dues in installments, and discounts for households and businesses are among the government’s plans for supporting the state budget in terms of revenues and spending.

The funds being distributed are rapidly depleting the state coffers, forcing the government to proceed with one-off measures or introduce incentives for the timely payment of tax and social security obligations. Besides the ongoing discounts, the government is also examining a plan based on two pillars: conditional discounts on the income tax and Single Property Tax (ENFIA) of all taxpayers, and a significant reduction of taxes for those hurt by the pandemic.

Among the measures set to apply horizontally is a 5-10 percent discount on the income tax of all individuals and businesses that pay their dues in a lump sum by the deadline for the first installment – whenever that may be. The discount is meant to discourage taxpayers from resorting to tranche arrangements (a new, low-interest payment plan is in the works) and haul in a large portion of income tax in August or September. Out of the 3.5 billion euros that income tax declarations fetch, the state may miss out on up to 350 million euros, but will earn substantial benefits from the early payment.

A similar discount of 5-10 percent on ENFIA is being planned for property owners, again when paid at once before the first tranche’s deadline. ENFIA is calculated about a month after the processing of income tax statements is completed. The first installment is due by end-September, but this year it may be put off to end-October. If the government resorts to this measure too, taxpayers could earn up to 250 million euros. A 25 percent discount is being prepared for landlords if their tenants have been hurt by the crisis and are among those who pay 40 percent less rent.

The government is considering slashing this year’s flat corporate tax rate from 24 to 20 percent, which will burden next year’s budget, but if it applies to last year’s earnings, it would shave 400-500 million off budget revenues.

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