ECONOMY

Call to raise tax threshold

Umbrella trade union body GSEE and tax officers yesterday suggested that the State raise the tax-free threshold for personal income to over 10,000 euros, substantially above the current level. Presenting the conclusions of a two-day seminar on taxation, GSEE head Christos Polyzogopoulos proposed a tax-free ceiling of 13,200 euros for wage earners. Tax officers in turn recommended a limit of 11,700 euros, saying a tax-free threshold should be able to cover families’ basic living requirements. Greece last year increased the tax-free threshold for salary and wage earners to 8,400 euros as part of a mini-package of tax measures. The government is due to present legislation this month that seeks to modify the tax system, making it clearer, simpler and fairer to taxpayers. The Greek tax system has gained notoriety for its complexity and obscurity. The changes are due to come into force next year. The proposed tax reforms should focus on simplicity, transparency and fairness, seminar participants emphasized. Consistency is equally important. They also called for an end to unnecessary tax credits which in general favor wealthier families. Pointing to the preponderance of indirect taxes in Greece, the highest among OECD countries, the participants suggested that these be reduced and the State counterbalance the loss of revenues by increasing direct taxes. They said Greece could learn from other eurozone countries such as France and Portugal which have lower VAT, while in Spain lower-income wage earners do not even need to submit tax returns. The participants also called for clearer rules for companies and cooperation with OECD members on the tax regime for offshore companies. The Finance Ministry plans to take measures, closing loopholes for these firms. «It’s a very uncertain period now. I think there will be more pressure on him (Ecevit) to just step back and name his successor as soon as possible. We might see some developments toward this in the next couple of weeks and that will be quite positive for the markets,» said Yarkin Cebeci of JPMorgan Chase.