The International Monetary Fund has called for a reduction of the Greek income tax threshold from 8,636 Euros to 5,000 Euros per year, as proposed by the World Bank, while the Eurogroup president Jeroen Dijsselbloem revealed Thursday that additional short-term measures for relieving Greece’s debt in 2018 are ready.
It is believed that if the IMF is satisfied with the measures, it will participate in Greece’s bailout program, though it may hold out on the issue of Greece reducing its income tax threshold.
The IMF believes that Greece’s tax reforms have not addressed its generous tax exemptions, which give over 50% of salaried workers exemption from paying income tax, compared to the Eurozone average of 8%.
The Fund’s insistence on this issue has raised concern in Athens which fears its creditors may adapt the IMF’s tough stance on the tax threshold reduction issue, especially as both sides acknowledge that there is a fiscal gap for 2018.
Should the Greek income tax threshold be reduced to 5,000 euros, it will mean that each taxpayer is burdened, on average, an additional 800 Euros per year.