Currently, income up to €19,500 is not taxable. An employee with a gross monthly income of €1,500 does not pay any direct income taxes. This level of non-taxable income maybe considered extremely high by Troika especially when compared with other countries. In Greece, taxable income is considered anything above €5,000.
The government will most likely not resist lowering the level of taxable income to €17,000 if not more. It is an easy way to increase revenue which does not reduce nominal wages. An employee will still have the same gross income but net earnings will be reduced.
This reduction of taxable income, will generate at least 100 Million Euro in additional taxes if there are at least 200,000 employees earning a minimum of €19,500.
|Income Taxes||€0||€500 (20%)|
This table shows that if the income tax-free level is reduced by €2,500 and the taxable rate remains at 20% as it is currently now for anything above €19,500, then for tax year 2012 the income-tax burden will increase by €500.
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