Τaxpayers to feel the ‘bite’ of the reforms on… June 1
Most tax hikes approved on Sunday evening in a closely watched vote in Greece’s Parliament are set for activation as soon as the end of the month, as the leftist Greek government passed twin tax and pension reform bills by the expected margin of 153 MPs in favor – the number of deputies out of the 300 in Parliament that back the current coalition.
Beyond the expected “tax wave”, a last-minute amendment over the weekend lowered the annual tax-free ceiling for taxpayers under the 9,000-euro level, a long-standing demand by creditors that Greece’s relatively small tax base be expanded downwards.
Another percentage point tacked on to the VAT rate, raising the highest rate to 24 percent, will go into effect on July 1, while the tax rate on profits for personal companies will rise from 26 to 29 percent for 2016.
Beginning on June 1 excise taxes will be raised on all fuels, including natural gas. Other increases will be slapped on customs clearance duties for vehicles, beer, and tobacco products on July 1; an unprecedented 5-percent tax will be added to broadband connections and a 10-percent hike in subscriber TV rates. Additionally, the unpopular ENFIA property tax will be expanded at the beginning of the year.
The measures voted in Parliament by the coalition MPs – a majority of leftist SYRIZA deputies with MPs from the small, rightist-populist ANEL party – are roughly two-thirds of the 5.4-billion-euro package of measures to meet memorandum goals until 2018.
Another pending issue is a 3.6-billion-euro “contingency package” that lenders now demand on top of the previous package, a recently emerged demand that is expected to dominate a Eurogroup meeting on Monday.
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