The last tax reform took place in 2002 and one of its goals was to simplify the declaration submitted by taxpayers. In the context of the new tax reform announced by the government, some issues and problems facing society in general, but especially young people, must be taken into account, as well as the announcements of President Christodoulidis in support of them.
During the election campaign, President Christodoulidis promised to increase the tax-free income to 24,000 euros for every taxpayer. I personally think this amount is too high. Since the wages of around half of the workers are below the taxable income of 19,500 euros, such an increase helps the high earners, the singles, but not the family heads and especially the young people.
What needs to be done is the introduction of the joint tax declaration of couples, as suggested by Mr. Averof Neophytou and which exists in many countries.
There are cases, mainly among young couples who want to start a family and for a while only the husband works. If his salary is, for example, 39,000 euros, he will pay – in fact the couple will pay – a respectable amount in tax. But if family income applies, the couple will not pay income tax. In this way, mainly young couples are helped, especially those who want to have a second and third child, maybe even more. Let’s not forget the demographic problem facing our country. Whether the tax-free income increases to 24,000 euros, or remains at 19,500 euros, will have to depend on other deductions included in the tax reform.
One tax deduction that the government should consider and introduce is the deduction from taxable income of a percentage of the interest that taxpayers pay for a home loan, or even for paying rent. Acquiring housing, especially for young couples, is a big headache. It is well known how expensive it has become to acquire a home, forcing couples to secure loans for 30+ years and pay high installments, especially low-income earners. Such a discount would make it easier for young people to start a family and get their own home. This, of course, can be combined with provisions of a comprehensive housing policy from the government.
The tax deduction for the payment of rent will help the state to collect additional taxes from the incomes of house and apartment owners who either do not declare these incomes or declare smaller amounts. But when the tenant will attach the receipts for the payment of the rent with the details of the owner to get his tax deduction, it will be difficult for the owner not to declare the exact amount of the rent of the apartment, or the house.
Another deduction that should be considered in the new tax reform is the deduction of an amount that parents pay for their children’s private school fees. A child’s attendance at a public school costs the state more than ten thousand euros, an amount that is saved by attending a private school. At the same time, with the fees paid by the parents, many jobs are created, since several hundred teachers and other staff are employed in the private schools. Therefore, it makes sense to give a tax break to parents who send their children to private schools.
It is up to the government, especially the finance ministry, to seriously study these proposals and adopt them in the upcoming tax reform.
- Political Scientist – Journalist