Greece plans to tax businesses and middle incomes more in an effort to raise revenues from a tax reform bill it has long-promised its international lenders, a senior finance ministry official said on Thursday.
The finance ministry plans to raise the corporate tax rate on profits to 26 percent from 20 percent, said the official, who declined to be named. In dividends, the rate would fall to 10 percent from 25 percent currently.
The ministry’s proposals include reducing tax brackets to three from eight and imposing a 40 percent top rate on incomes above 40,000 euros. Currently, the 40 percent tax rate applies to those earning over 60,000 annually and those earning over 100,000 euros are taxed at 45 percent.
“The new tax system is simpler, fairer and geared toward growth,” the official said.
The proposals offer some relief to low incomes, as tax exemptions for wage earners and pensioners would be increased to 9,000 euros from 5,000 euros currently for those earning up to 25,000 euros.
Greek press had speculated that the government planned to apply a 45 percent top tax rate on incomes above 26,000 euros and abolish tax credits for dependent children, deepening anger among a public worn down by five years of recession.
(source: Reuters)
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