Greek finance minister Euclid Tsakalotos said it clearly on Friday during his press conference after the Eurogroup meeting “The measures will be unpleasant for the Greek people.” the additional austerity measures the Greek government agreed with creditors is a 1%+1% formula for the years 2019 and 2020, a total package of 3.6 billion euros. the same amount will disappear form the pockets of low-incomers, low-pensioners and farmers in 2020.
Pensioners will see 1.8 billion euros disappear from their pockets in 2019. The same amount will disappear form the pockets of low-incomers, low-pensioners and farmers in 2020.
And this is the good scenario. “If in the second half of 2018 it will be determined that the targets for the primary surplus have not been achieved, then lowering the tax-free threshold will be implemented already in 2019,” daily ta nea notes.
The lower tax-free threshold will reportedly be accompanied by a lower tax rate.
Currently the tax-free threshold is at 8,636 euros, any income about is taxed with 22%.
The new measures will lower the tax-free down below 6,000 euros with the option the tax rate at 20%.
The annual burden for those having an income of hardly above 500 euros per month will be around 600 euro.
Especially affected will be pensioners who will suffer double loss: pension cuts and decreased tax-free threshold. the burden could be around or above 1,200 euros.
Should the primary surplus in 2018 be just 2.5% and not 3.5% as it has been determined, then both measures will apply as of 2019.
If the 3.5% target is achieved, then the Greek government plans to launch a package of social measures, estimated worth 1.8 billion euro for 2019-2020.
In addition to these counter austerity measures, Greek media report on Saturday for lower taxation fro businesses form 29% to 26% but also reductions in unified property tax , total worth 250 million euros.
However it should be noted that it is not definitely clear whether the tax rate for natural persons will be lowered because of the tax-free threshold or in connection with the social measures package.
The International Monetary Fund has not spoken yet…