Tax rate for incomes up to 50,000 euros to be phased down to 25 pct from 2007

The tax rate for incomes up to 50,000 euros a year will be reduced from 40 percent to 25 percent over three years, starting in 2007, Economy and Finance Minister Giorgos Alogoskoufis said yesterday. He said the reform, on which the government will legislate this year, will have significant benefits for all taxpayers and that more than half of them will end up paying no income tax. Alogoskoufis said the ministry intends to raise the income-tax-free threshold from 11,000 euros to 13,000 euros, after which the 25 percent rate will apply up to 50,000 euros. Incomes above this amount will be subject to a 35 percent rate. The government also intends to raise the tax-free threshold for large properties, he said. According to sources, this will go up to 300,000 euros for single people and to 600,000 euros for married couples. The present tax-free thresholds are 243,600 euros and 487,200 euros respectively. Details will be announced next month. Separately, sources said the government is also preparing legislation which will allow it to sell and lease back valuable state property, particularly along the Attiki Odos highway but also in the center of Athens. In order to make such properties – which exceed 25 acres in area in total – more attractive to investors, the government is thinking of changing building regulations and possibly the designated land use around them.

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