Scenarios about the elimination of the tax-free limit

The finalization of the 11.5-billion-euro package, and in particular the need to close all open fronts with the lenders by the end of September, brings new interventions in taxation issues. 

Within no more than 10 days the economic team must agree with the Troika on how to cover the hole in the package of measures, so that the EU, the IMF and the ECB will give the green light for the disbursement of the tranche of 31.5 billion euros in the October Summit.

Officials are also thinking of eliminating the tax-free limit of 5,000 euros and replacing it with a discount through receipts and a new tax bracket. If these measures do qualify, it is estimated that the government could save about 2.5 to 3 billion euros.

According to sources, the Finance ministry is promoting a plan for a 100% deduction of specific categories from the income of axpayers with receipts who, according to data from the General Secretariat for Information Systems, are "champions" in tax evasion.

In the case of adopting the recommendation to eliminate the tax-free limit of 5,000 euros only for taxpayers with incomes from individual businesses and freelancers, then their income will not be taxed on the basis of the individual scale, but will be subject to separate taxation at a rate of 20%.

On the issue of eliminating the tax-free limit, there is disagreement among members of the Finance ministry and it is estimated to cause new turmoil in society and new cracks between the parties that support the government. For this reason, it is most likely that it will be adopted only for freelancers and traders.

And regarding the proposal for a deduction from the income of a certain level of receipts, the IMF has already submitted a proposal for a cap at 2,160 euros. The Finance ministry is considering the adoption of the so-called "American model" which involves removing all costs from taxable income, even those involving the payment of bills of electricity, water, etc., apart from the cost of acquiring personal assets.

The government is also thinking of bringing the new package of measures as one single article in parliament, to ensure that it will pass as it is and that there will be no leaks from governmental MPs that might want to vote against some of its measures.

Samaras has told the government partners that he must appear at the Summit on October 18 with the measures approved and voted for by the parliament.