FinMin reiterates intent to ‘avoid’ austerity measure entailed with lower tax-free income threshold

10 December 2018
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The poll-trailing Tsipras government will reportedly attempt to dodge another creditor-mandated “bullet” in the coming year, after ultimately avoiding a pre-legislated round of pension cuts that were scheduled to be implemented on Jan. 1, 2019.

After gaining European creditors’ approval earlier this month to suspend the social security reduction, the leftist-rightist coalition government has set its sights on suspending a lowering of the annual tax-free income threshold, which is set to come on line on Jan. 1, 2020, falling to roughly 5,600 euros.

Creditors, especially the IMF, and even international organizations, such as the OECD, have long called on successive Greek governments to expand the tax base, as over past decades the main contributors to state coffers, in terms of individual income tax revenues, were private and public sector wage-earners, along with pensioners, in the middle income brackets.

Nevertheless, the current government rode to power on a radical, anti-austerity and anti-bailout platform that included, among many other promises, a pledge to raise the tax-free income threshold to 12,000 euros.

In statements carried over the weekend by the Athens daily “Kathimerini”, Finance Minister Euclid Tsakalotos referred to the “prospect” of freezing the coming austerity measure, without, however, offering an absolute commitment.

His comments echoed a similar quip by Labor Minister Efi Achtsioglou, who called the measure “unnecessary”, saying the Tsipras government will attempt to suspend its implementation.

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