The International Monetary Fund want the annual tax free income for employees and pensioners to fall down to just 3,500 euro from currently 8.636 euros. This is reportedly one of the IMF’s conditions in order to participate in the Greek program.
According to the front page of financial news newspaper “Agora”,the Fund requires from the Greek Finance Ministry to reduce the annual tax allowance from €1,900 down to €700.
The Fund believes that this option can save around €3.6 billion, while additional €900 can be saved by abolishing the “personal difference” in the main pension. These two measures will make the required 3.5% of GDP achievable in 2018.
“This is the ledners’ proposal to conclude the second program review, a proposal inspired by the IMF and in agreement with the EU Commission,” Agora notes.
Here we should note that the IMF has repeatedly called in 2016 for lower taxes for entrepreneurs in order to boost competitiveness.
Previous media reports had claimed that the IMF wanted the tax free annual income to be down to 5,000 euro. This would mean to tax the poor earning some 400 euro per month.
Of course, the lenders insist on taxing the low incomes as the majority of workers and employees earn some 400-500 euros per month according to labor contracts signed in the last one and a half year. Blame the derailed labor market, the lack of liquidity.
But who cares? The scenario of turning Greece into EU’s China seems to prevail.