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Non-taxable minimum income is to be removed

14 September 2012 / 20:09:13  GRReporter
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The economic commission to the government is considering the removal of non-taxable minimum income in order to avoid cuts in the public sector. This proposal has been put on the table after the politicians from the government rejected the creditors’ proposal to significantly reduce costs of public administration by closing organizations and cuts.

Currently, the non-taxable annual income in Greece is to the amount of 5,000 euro. It is equivalent to the social benefit an employee dismissed from the private sector will receive from labour offices for a year. This amount does not cover the cost of basic needs, according to data from the National Statistical Service, which in April this year determined the minimum amount for crossing the poverty line as 7,178 euro per year.

If the minimum non-taxable income is removed, the people in the lowest income bracket will have to pay for their "luxury" living a tax of about 500 euro only to allow public workers to keep their jobs. Along with that, taxes for people with higher incomes will increase too. Taxpayers who earn up to 22,000 euro will pay 35% instead of 18% as it was before. The fiscal benefits of this extreme measure will be between 2.5 and 3 billion euro, if taxpayers are not entitled to any concessions, tax experts in the country estimated.

At the same time, Greece is still facing the problem of tax evasion and the widespread concealment of income. The demonstrative inspections made by the government have revealed some shocking cases, like that of a municipal councillor with a bank account of 1.9 million euro.

The cases of those Greeks, who have exported their funds abroad, mainly to Switzerland, without accounting them in the country, will not be revealed. The Association of Swiss Banks refused already in April to announce the names of Greek citizens, who have accounts in financial institutions in Switzerland. Famous Greek businessmen and politicians are supposed to be among them, but their names cannot be disclosed. Although the refusal to reveal the identity of the Greeks with significant Swiss accounts was received nearly six months ago, the politicians in the country continued to make empty promises during the two election periods that they were working on the matter.

In early April this year, 224 Greek deputies sent a request to the Swiss authorities to announce the names of Greek customers in local banks. The response was swift and negative: "As we have already responded in our e-mails of 25 April and 11 May, the policy of the Association of Swiss Banks does not accept such general requests," the Association replied cited by Naftemporiki. "Swiss banks are not obliged to issue assurances that a person does not hold an account with them," continues the message.

The Swiss deputy of Greek origin Josef Zisiadis recognized in the spring that a political game was being played with the subject of the opening of Mediterraneans’ accounts. "The majority of deputies and PASOK, and the right have a lot of money here in Switzerland and I think they are not interested in opening these accounts," he said earlier this year.

Tags: EconomyMarketsTaxesNon-taxable minimum income
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