One proposal by the Greek government this week to allay creditors’ concerns that primary budget surplus targets will be met by the country through 2018 was to link the tax-free ceiling for annual income with the number of dependents (minors) a taxpayer declares.
Creditors, the so-called “Quartet”, have demanded a decrease in the 2,000-euro deductible given to all tax brackets as well as the expansion of the tax base downwards. A previous tax-free ceiling was 9,545 euros in annual personal income, which was subsequently lowered to around 9,000, although lenders – Commission, ECB, ESM, IMF – have called for an even greater decrease.
Creditors point out that the very large majority of registered taxpayers in Greece – including many self-employed professionals, shop owners, craftsmen, farmers and seasonal workers – declare annual returns below 9,000 euros.
The latest Greek government proposal would lower the ceiling to between 8,182 and 9,090 euros depending on the number of dependents a taxpayer lists. For instance, a taxpayer with two or more dependents would enjoy a tax-free income ceiling of 9,090 euros.
