Troika is reportedly putting pressure on Finance Ministry to put the knife deeper in the income of free-lancers and self-employed. Greek media report that the representatives of Greece’s lenders want to increase the withholding of tax from 20% currently to 26%.
In practice the new tax rise will look like that:
if a free-lancer (journalist, web-developer), a self-employed (electrician, plumber) and in general anyone offering services to companies, receives 500 euro gross as payment, he will receive first of all 370 euro at hand after the increased tax withholding (now he receives 400 euro).
What is 30 euro more for the tax office, but less for the free-lancer? I know journalists who get paid 500 euro on free-lance basis and from this amount also 300 euro for social security contributions per month have to be paid. self-employed have to pay at least 250 euro per month on social contributions.
Media report that the Troika also demands to repeal the provision of 1.5% discount on monthly withholding of tax for employees and pensioners.
Daily Eleftheros Typos claims, the political leadership of the finance ministry is likely to accept these new tax collection measures that are expected to bring additional revenues of 150-200 million euro to the state budget of 2014.
The new tax withholding arrangements will be included in the new tax bill to be submitted to the parliament together with the provisions for the new ‘unified property tax” and incentives for the collections of receipts.
PS Of course, one could argue that the difference of 6% in so big deal as at the end of following year, the finance ministry will return the additional tax paid by the taxpayer. I just heard on Greek TV that 130,000 taxpayers are still waiting their tax returns from the Greek Finance Ministry.