Concessions in tax bill
The draft of a new tax bill aimed at bringing in 3 billion euros in much-needed revenue over the next two years, presented by Finance Minister Yannis Stournaras to members of the three parties in the coalition on Thursday, combines an increase in income tax with a stricter system of issuing social benefits for families.
The draft, which must be approved by all three party leaders before it is submitted in Parliament next week, sets out less harsh increases to income tax than an earlier ministry proposal. It also offers benefits for families with children and low incomes. To make up for the revenue lost by offering this safety net to low-income families, the draft foresees an increase in the annual levy paid by self-employed professionals and businesses, from 500 euros to 650 euros and 1,000 euros respectively.
According to the plan, incomes of up to 25,000 euros will be taxed at a rate of 21 percent, incomes between 25,000 and 40,000 euros at 36 percent and incomes over 40,000 at 40 percent.
The income tax-free threshold of 5,000 euros will be abolished and a 1,950-euro reduction in taxes introduced for those earning up to 18,000 euros per year. This reduction will be smaller for higher incomes. The tax break will be boosted by 5 percent for every child in a family.
If the draft law is approved, a family with one child and an income of 30,000 euros would pay 630 euros more in income tax than now.
To offset the additional tax burden on ordinary citizens, the government has said it will come down harder on wealthier Greeks. Greece and Switzerland could be in a position to approve an agreement for the taxation of deposits held by Greek citizens in Swiss banks, a Finance Ministry official told Kathimerini. The key issue to be resolved is the rate at which the Greek savings in the Swiss banks will be taxed. According to sources, the two sides are considering a sliding scale of between 15 and 38 percent depending on the size of the deposit. Of some 38 billion euros held by Greeks at Swiss bank, about a third belongs to shipowners, sources said.
