By G. Palaitsakis
Up to 1.5 million taxpayers in Greece, mostly low wage-earners and lower-income pensioners, would be affected if the government relents and lowers the annual tax-free threshold, a standing demand by the IMF in order for the Fund to remain active in the Greek bailout program.
The current tax-free threshold is at 8,636 euros in yearly income, although the IMF has proposed it be lowered to anywhere between 6,000 and 7,500 euros a year. The Fund has repeatedly pointed out that Greece has one of the narrowest tax bases in the Euro zone, primarily due to the high tax-free threshold. Additionally, tax evasion for various castes of self-employed professionals and craftsmen has often been cited as one main reason for meager tax revenues in Greece, compared to its European partners.
Certain tax-free levels for certain categories of taxpayers reach 9,545 euros a year.
Any changes would come into effect after 2018, although nothing has been announced yet, given that face-to-face negotiations between creditors and the Greek side have not recommenced. Nevertheless, the leftist Greek government has consistently refused to increase the tax base, and even more reluctant to legislate such measures via its razor-thin majority in Parliament.