Changes in tax contributions to affect 3,5 million people

Changes in tax contributions to affect 3,5 million people

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Approximately 650,000 farmers are expected to receive notices for their new hiked contributions covering the first half of 2016. Following a series of changes and tweaks, the new system for calculating contributions for professionals, farmers and scientists will take effect as of January 1, 2017. The new scheme provides that the new contributions on the taxable income will be paid on a monthly basis at the end of each month, which means the first income contributions will have to be settled by the end of February in 2017. Authorities are considering testing the new scheme by dispatching notices, until the electronic system is in operation. The government’s plan also includes the following changes concerning income contributions for farmers, employees, freelance professionals and workers on farmlands:

-the basis for calculating income contribution will be the 2015 declared income which was cleared in 2016,

-the increase of social security withholdings of the main pensions and an indirect reduction of wages for more than 650,000 public servants via deductions on the nominal income of employees, as newspaper Eleftheros Typos reports,

-public servants such as, judges, university professors, public hospital doctors etc will be affected by a 6% indirect cut in their earnings vis withholdings on the sum of their income,

-thousands of seasonal workers on the OGA (farmers’ pension fund), who will be transferred to the Social Insurance Institute (IKA) are expected to be burdened with a 3.5% contribution for ancillary social security and 1% for the unemployment sector,

-there will be a gradual reduction between 2017 and 2020 on the contributions of newcomers and old insured employees who were hired in Public Utility Organisations (DEKO) and banks,

-all professionals using personal receipt booklets will be charged with a 26.95% on their income from January 1, 2017.

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