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Papandreou serves 14 billion euros tax cocktail to Greeks

25 June 2011 / 19:06:10  GRReporter
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Tax burden for employees and retirees contains the bill "Urgent measures to implement the medium-term fiscal strategy framework for 2011 - 2015" which will be submitted to parliament on Monday. 

In particular, according to the provisions of that bill, from January 1, 2011 retroactively applicable is the new regime for receipts based on which discounts, but also solidarity fee cannot exceed 300 euros, a fact which will lead to higher withholding tax in the coming months. 

When it comes to the receipts, if a taxpayer has received a greater discount than 300 euros he will be forced to return it and pay the joint fee because the bill clearly states "in cases where the tax financial statements for 2011 are completed and a tax of more than 300 euros is deducted, then the additional tax shall be certified by a special tax for individuals." 

Late yesterday the Treasury seems to have repealed the provision due to the violent reactions caused by the retroactive taxation. 

Also it should be noted that in the future in order for taxpayers to reach the taxable income of 8,000 euros, they will have to collect receipts for 15,000 euros, because according to the bill, "the sum of receipts for expenses to be submitted is determined at 25% of the taxpayer’s individual income, according to the general provisions and the income amount of up to 60,000 euros. If the amount of submitted receipts for costs incurred by the taxpayer is less than the above amount, then the difference is subject to a tax rate of 10%." 

It should also be noted that for income up to 40,000 euros, the discount rates for housing loans, medical expenses, contributions, etc., will remain 20%, but "for that fraction of the cost, which corresponds to the amount above this income (e.g. 40 000 euros) to reduce the rate of tax is limited to 10%."

Craft Tax 

Noteworthy is the fact that artisanal tax will start from 400 euros, as it provides that: 

* For businesses or individuals, freelancers, located in tourist areas and in settlements with a population of 200,000 inhabitants, is fixed at 400 euros per year 

* For businesses or individuals, freelancers, located in cities with population over 200,000 inhabitants, 500 euros per year. 

Attica and Thessaloniki are considered as one location. 

Moreover, if those firms have branches there is an additional craft tax of 300 euros for each branch. 

"Shock and awe" among taxpayers caused the new tax cocktail "which in the next six months will need to bring to the state treasury the sum of 3.095 billion euros and by the end of 2015 a total of 14.090 billion of additional taxes. 

With the reduction of the amount of taxable income and the increase in indirect taxes, the “Cocktail” of new taxes will take 450 euros per month from nearly 5 million taxpayers or about 5,500 euros a year if kept in mind that from 2012 the change in receipts system takes place. 

In particular, from January 1, 2012 imposed will be a ceiling of 300 euros for tax return and removed will be the 10% discount that applies today to receipts collected beyond those needed to prove the non-taxable income. 

It should be noted that with the measure until now, the state has lost this year 612 million euros, but it believes that it will recover those losses in 2012, when 612 million euros should be collected when the new regime will be applied. 

The income tax attack began this summer with an increase in withholding tax on salaries and pensions due to the reduction of taxable income of 8,000 euros, of which the economic staff of the Government expects to collect 338 million euros in 2012 - 1.012 billion, by continuing with: 

* special solidarity contribution, which all taxpayers are invited to pay and it is estimated that it will bring 1.38 billion euros this year
* the increase of VAT from September 1, from 13 percent to 23 percent, which will "cost" another 300 million euros and 700 million euros in 2012 

* the tax increases on cigarettes, with change in the tax on tobacco and reduction of the time for payment of excise duty on firms from 56 to 26 days, which would bring the Treasury another 150 million euros this year and more so in 2012 

* the increases in tolls with 10%, which will "cost" 100 million euros 

* the extraordinary payment for vehicles with larger engine capacity, expensive real estate, yachts and pools that will bring 150 million euros 

* the declaration of ownership of private yachts, an amount of 150 million euros 

* the "settlement" of the issue of illegal constructions, which will bring 300 million euros 

* the special consumption tax, which may yield an additional 250 million euros this year and 315 million euros in 2012 

As for the new tax imposed on freelancers and artisans, it is estimated that it would bring 400 million euros in 2012, while another 220 million euros will provide the new enhanced indexes, which will apply to all taxpayers. 

It is noted that the evaluation and reduction of tax relief this year, naturally it cannot expect revenue in 2012 but family budgets are still burdened with another 380 million euros. 

On the other hand the reduction of tax-exempt property tax threshold from 400,000 euros to 200,000 euros will "throw" more owners in the tax network, which will bring additional 445 million euros in 2012. 

Tags: Papandreou Greece crisis tax measures economy
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