Gov’t mea­sures from Jan­uary 1 to hit tax­pay­ers, busi­nesses hard

Kathimerini English - - Focus - BY PROKOPIS HATZINIKOLAOU

Tax­pay­ers have al­ready started feel­ing the impact of the gov­ern­ment’s new aus­ter­ity mea­sures that came into force on Jan­uary 1, with six new taxes set to eat into house­holds’ al­ready di­min­ished dis­pos­able in­comes as of this month.

The prices of fuel, con­ven­tional and elec­tronic cig­a­rettes, cof­fee and fixed tele­phony ser­vices have risen overnight, while a num­ber of Aegean is­lands have seen the ter­mi­na­tion of the 30 per­cent dis­count on the value-added tax their in­hab­i­tants pay.

On top of that, tax­pay­ers will also have to sub­mit their in­come tax dec­la­ra­tions for 2016 rev­enues ear­lier than usual, mean­ing they will need to pay their first in­stall­ment of their dues to the tax au­thor­i­ties by the end of June.

Most salary work­ers and pen­sion­ers will see their take-home shrink due to higher in­come tax and sol­i­dar­ity levy dues for their 2016 rev­enues, as the new tax sys­tem pro­vides for a re­duced taxfree ceil­ing and re­vised rates. The tax and the sol­i­dar­ity levy for the last five months of 2016 are cal­cu­lated ac­cord­ing to the new sys­tem.

Land­lords also face an in­crease in the tax due on the rent they col­lect: For their 2016 rev­enues they will have to pay tax of 15 per­cent (against 11 per­cent) for an­nual tak­ings of up to 12,000 eu­ros, and 35 per­cent (from 33 per­cent) for rev­enues up to 35,000 eu­ros. There is ad­di­tion­ally a new rate for rent earn­ings in ex­cess of 35,000 eu­ros per year, at 45 per­cent.

Ac­coun­tants tell Kathimerini that 2017 prom­ises to be a very tough year for tax­pay­ers and en­ter­prises due to the higher taxes and so­cial se­cu­rity con­tri­bu­tions, which is ex­pected to lead to an ex­pan­sion of the black econ­omy, a rise in busi­ness clo­sures and growth in ar­rears to the state and the so­cial se­cu­rity funds as many Greek house­holds and busi­ness­peo­ple will be un­able to meet all of their obli­ga­tions. The lat­est fig­ures are al­ready show­ing tax­pay- ers’ and cor­po­ra­tions’ debts to­tal­ing 94.2 bil­lion eu­ros, a fig­ure that will likely rise above the 100-bil­lion-euro mark by mid-2017.

Worse, the new so­cial se­cu­rity con­tri­bu­tions sys­tem and the cir­cu­lars pub­lished fail to clar­ify a se­ries of sig­nif­i­cant is­sues, mean­ing that the im­ple­men­ta­tion of the law will be ex­cep­tion­ally dif­fi­cult.

As of this year tax­pay­ers will only be en­ti­tled to the an­nual tax dis­count of 1,900-2,100 if they man­age to cover a 10 to 20 per­cent share of their an­nual in­come through elec­tronic pay­ments; the pre­cise rate de­pends on the amount of in­come. If they fail to do so, they will face a penalty, with the ex­cep­tion of peo­ple liv­ing in re­mote parts of the coun­try or over 70 years old.

In­di­rect tax­a­tion on cof­fee and cig­a­rettes soared at the start of the new year. this is ex­pected to con­sid­er­ably re­duce their le­gal con­sump­tion and in­crease the black econ­omy in those sec­tors.

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