The Greek government continues to face pressure from
the International Monetary Fund (IMF) to lower its annual tax-free threshold,
which would force up to 1.5 million more people, including low-wage earners and
lower-income pensioners, to enter the tax base.
As Greece looks to continue in its bailout program, the IMF
is demanding that the country lower its tax-free threshold, which is one of the narrowest in Europe. The IMF has tied its future
participation in the Greek bailout program to the lower tax-free threshold, a
demand the country’s government has consistently pushed back against and would
likely be reluctant to legislate in Parliament, where the current leftist
government has only a narrow majority.
Greece’s current tax-free threshold sits at $9,203.04, although with in some tax-free categories it reaches $10,171.72. Additionally, tax
revenue in the country is affected by tax evasion by some self-employed
professionals and craftsmen. These factors have had a limiting affect on tax
revenue in Greece, giving the country small yields in comparison to other
European countries.
The IMF recently proposed lowering the tax-free threshold to
rest somewhere between $6,393.96 and $7,992.45. Face-to-face negotiations
between Greece and creditors have not yet begun again, and any changes put into
effect would not apply until after 2018.
