Greek govt's proposal to creditors worth 2 bln € in tax hikes

Greek taxpayers in the so-called “middle” and “upper” tax brackets are expected to dig even deeper into their pockets this year, as the government in Athens mostly based its ideas to cover fiscal gaps with higher taxation. The measures were included in a latest proposal delivered to institutional creditors on Thursday evening.

 

Tax hikes must generate an extra two billion euros in revenues.

 

The package of mostly higher taxes was reportedly accepted by representatives of three out of the four creditors (Commission, ECB, ESM) but rejected by the IMF, which has long called for spending cuts and measures to boost economic growth instead.

 

According to information obtained by “N” , the leftist Greek government wants 1.3 billion euros out of the two-billion-euro target to come from a wider collection of the so-called “solidarity tax”, meaning higher taxes for taxpayers and households with more than 24,000 euros a year in gross income. The remainder, 700 million euros, will come from higher taxes on mid- to higher incomes and an increase on taxes for dividends.

 

The tax-free ceiling, according to the proposal, would fall slightly to 9,000 euros from the current 9,545 euros. Self-employed professionals will be taxed based on the scale used for wage-earners, without a 2,000-euro tax discount.

 

Farmers will have a tax-free ceiling of 9,000 euros, while the “solidarity tax” will be slapped on incomes above 25,000 euros.

 

The primary tax rate for businesses, moreover, will skyrocket to 39.7 percent, whereas income from property leasing will be taxed with three different rates, depending on the property owner’s other income: 15, 35 and 45 percent.