2016 – The Year of New Greek Tax Hikes

I suppose, the majority of Greeks spent the 3-days break with their television set off. That’s why, they are still alive on Monday, January the 4th. Had they turned their TVs son, they would had for sure suffered brain strokes, heart collapses and breath halting due to the tsunami of new taxes that will sweep through all levels of society of taxpayers.

Employees and pensioners, farmers, self-employed, small and middle entrepreneurs and homeowners will be called to pay the price for creditors’ generosity to have saved Greece.

To start with, the Finance Ministry will grant tax-breaks to employees and pensioners only for expenses made through the use of plastic money or bank transactions. This class of taxpayers will be obliged to spend 10% of annual income via e-payments. Allegedly, the Greek economic team considers to raise the expenditure obligation to 20%.

Exempted from the e-payments vs tax-breaks formula are pensioners over 75 and residents of remote areas.

There are apparently thoughts to bring back the “5,000-euro tax-free” amount for self-employed so that they will also be part of the “plastic money” game. Currently self-employed are taxed from the first euro they put in their cash register.

700,000 self-employed will be called to pay 75% tax in advance for the income of 2015. Currently the rate is 55%. As the incomes of 2016, the same category of taxpayers will have to pay 100% tax in advance. The same tax conditions are avlid also for free-lancers.

Farmers will also see their tax payment in advance rise form 55% to 75% but also see their tax rate hiking to 20% from 13%.

Enterprises will have their corporate profits of 2015 been taxed with 29% – instead of 26%.

Income from leasing property will rise to 15% from 11% now for annual income up to 12,000 euro and to 35% from 33% now for income higher than 12,000 euro.

Hikes in Solidarity tax for annual incomes of more than 30,001 euro. The hikes are:

from 1.4% -> 2% for income 30,001 – 50,000

from 2.1% ->4% for income 50,001-100,000

from 2,8% -> 6% for income 100,001 – 500,00

from 2.8% -> 8% for income 500,001+

These tax hikes were adopted by the Greek parliament in the middle of the tax period 0f 2015. In real Greek life, this means that the tax hikes came retrospectively.

The Finance Ministry plans also additional changes in the taxation of incomes and property taxes, but the year is still very young. They have time to add as many taxes as they wish.

BTW the only fair tax hike is that of Solidarity Tax and even there, there is some discrepancy for the income around 500,000 euro.

PS I would propose, a new tax to be applied on each and every month of 2016. But I don’t make such a bold proposal as I am not thaaat mean.