A new tax blow awaits the usual taxpayer classes that pay their taxes anyway: the class of employees and pensioners. In a new attack of ‘tax paranoia’ the Greek Finance Ministry decided to squeeze the last drop of blood for one more time by introducing the measure of taxes in advance if the employees and pensioners have any additional income from renting a property or having an additional self-employed work.
These taxpayers will pay in advance 55% of the tax they should and thus for the money they will receive a year later or even never.
Employee with annual income €20,000 has to pay tax €2,300 euro (after the tax-free deduction of € 2,100).
The taxpayer has also annual income €12,000 from leasing a property. Here the tax is €1,200.
The total tax is €2,300 + €1,200 = €3.500 + €1,925 tax in advance= €5,425
It is not clear whether 55% of the so called “solidarity tax” of €640 will be also paid in advance. solidarity tax is 1% for annual incomes 12,000-20,000 EUR and 2% for incomes 20,001-50,000 EUR. (source: Kathimerini)
The total weird thing – to say it politely – is that income tax for employees and pensioners is automatically deducted from the salary/pension each month. A fact that leaves little space for tax evasion – just in case that was the ‘noble aim’ of the Finance Ministry.
Another crazy idea of paying taxes in advance from leasing a property is that: a) leasing a property does not mean that the property owner indeed receives the monthly payments, as due to the economic crisis many tenants have outstanding debts.
and b) how can you pay tax in advance, if next month the tenant goes away and you are unable to rent the property again?
Not to mention the fact that self-employed offering services often receive their money with several months delay in times of recession and austerity.
Taxes are normally paid in late summer/early autumn months.
And so we finally think to know, how the Greek Finance Ministry will write down a primary surplus of more than 3 billion euro at the end of 2014.
An friend, 2 kids, jobless husband, with €12,000 annual income and €4,800 from rent (the apartment is from inheritance) told me this morning that her private euro-printing machine has run out of ink…
UPDATE 1:3o pm: After the outcry, the Greek Finance Ministry issued a statement Friday noon saying that “the news was not true” and that “taxes in advance will be paid only by companies and self-employed.”
However it looks as if the Kathimerini article was not out of the blue as there have been some changes in the taxation law that would indeed push some categories of taxpayers -pensioners, for example – to pay taxes in advance. For example in case, a low pensioner has additional income.
The FinMin does not change much in the real tax Greek world, imho. Taxes in advance based on last year’s income are not fair. I would even say it’s illegal as I don’t think that the Constitution foresees the payment of taxes based on future and fictional gains.
PS I’m just watching the Culture Minister on Skai TV, claiming without embarrassment or slight shame that “Samaras means tax decreases”. LOL
I remember some government officials to have claimed that there would be no new taxes. But I don’t remember if it was the Prime minister or some other government guy who said that.