Deal brings wave of tax hikes

Sec­tors from ed­u­ca­tion to ship­ping will be af­fected by pro­pos­als as part of new bailout agree­ment

Kathimerini English - - Front Page -

A bar­rage of new tax mea­sures are con­tained in the new bill pre­sented to Greece’s Par­lia­ment as a part of the coun­try’s new mem­o­ran­dum. The bill con­cerns mea­sures which are to be im­ple­mented im­me­di­ately as well as those to be adopted by Oc­to­ber 2015 and in the frame­work of the 2016 bud­get. Pend­ing their vote in Par­lia­ment, the mea­sures to be passed im­me­di­ately in­clude diesel fuel tax for farm­ers go­ing from 66 eu­ros per 1,000 liters to 200 eu­ros/1,000 liters from Oc­to­ber 1, 2015, and to 330 eu­ros by Oc­to­ber 1, 2016. Farm­ers’ in­come tax to be paid in ad­vance will rise from 27.5 per­cent to 55 per­cent. In­come tax for farm­ers is set to rise from 13 to 20 per­cent for 2016 and to 26 per­cent for 2017. Free­lancers will be sub­ject to a grad­ual in­crease from 55 to 75 per­cent in ad­vanced tax pay­ments for in­come earned in 2015, in­creas­ing to 100 per­cent in 2016. The 2 per- cent tax break for sin­gle pay­ments on in­come tax is also be­ing abol­ished from Jan­uary 1, 2015. Pri­vate ed­u­ca­tion, pre­vi­ously un­taxed, will be taxed at 23 per­cent, in­clud­ing the tu­tor­ing schools (fron­ti­s­tiria) that most Greeks send their chil­dren to but ex­clud­ing preschools. Re­duced value-added tax rates for is­lands are to be abol­ished com­pletely by the end of 2016, with en­force­ment stag­gered across three groups of is­lands from Oc­to­ber 1, 2015 to Jan­uary 1, 2017. Greece’s cred­i­tors are call­ing on the gov­ern­ment to stream­line and sim­plify the leg­is­la­tion for VAT, har­mo­niz­ing it with the code of tax pro­ce­dures, clos­ing le­gal loop­holes and re­duc­ing pay­ment times by March 2016. The in­come tax sys­tem for small busi­nesses be­low the VAT reg­is­tra­tion thresh­old must also be sim­pli­fied and made con­sis­tent. In­ter­est on ex­pired debts to the state that are payable in 100 in­stall-

691.40

1.1186 ments is to rise from 3 per­cent to 5 per­cent on amounts over 5,000 eu­ros. Amounts be­low 5,000 eu­ros are not sub­ject to in­ter­est pro­vided they meet cer­tain con­di­tions. Greece’s vi­tal ship­ping in­dus­try will also be sub­ject to new tax rises. Among other mea­sures, ton­nage tax is to in­crease by 4 per­cent an­nu­ally be­tween 2016 and 2020. A spe­cial con­tri­bu­tion by for­eign cargo car­ri­ers will re­main in place un­til 2019.

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