Eight new tax, revenue measures in Greece as of Jan. 1, 2018

27 December 2017
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Eight new tax and revenue measures are only days away from being implemented in still bailout-dependent Greece, with the target being another 951 million euros for state coffers in 2018.

As with previous such austerity measures, both in the first two bailout memorandums and in the current one passed by the leftist-rightist coalition government, the brunt will again be borne by wage-earners, pensioners, property owners and, in a new twist, tourism rental businesses.

VAT rates will also be harmonized (upwards) in 35 eastern Aegean islands, in line with the rates applied in the rest of the country.

At the same time, the state will cut tax rebates in 2018 by 1.929 billion euros. Some 5.577 billion euros will be funneled back to taxpayers in 2017 in the form of rebates, with the same figure for 2018 reaching only 3.648 billion euros.

The eight austerity measures include:

– elimination of a 1.5-percent monthly discount on income tax withholding for wage-earners and pension payments, which essentially means a bigger chunk of money will be withheld on a monthly basis.

– elimination of a tax deduction for medical, pharmaceutical and hospital expenses, which reached up to 10 percent in some cases.

– imposition of an “Airbnb” tax on the short-term leasing of lodgings

– imposition of an overnight stay tax at hotels and rented apartments, a bitterly opposed measure on the part of the country’s all-important tourism industry

– harmonization of the VAT rates on 35 islands in the Aegean

– elimination of a 100-payment installment plan for covering arrears to the state in case a new obligation becomes overdue

– a 50-percent reduction in the overall heating oil subsidy to be allocated to eligible beneficiaries in 2018, and finally,

– elimination of a tax deduction for Parliament deputies and judicial officials, a measure that affects only a few thousand taxpayers in the country, and high salaried ones at that.

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