2016 state budget extends austerity in Greece

The state budget for 2016 discussed yesterday until early morning on Sunday in the Greek parliament.

After a 12-hour debate, the budget was voted in with 153 votes in favor, and 145 against, with two MPs being absent.

The 2016 budget concerns mainly measures that have already been voted or will be voted in the upcoming days for additional taxation of citizens and businesses, including:

– a new VAT hike for the islands.

– an increase in income tax rate of legal entities

– an increased in special solidarity levy rate.

– an increase in the rate of insurance premium tax.

– an increase in tax rate of rent income

– abolishing the discount for paying off tax income in full

– abolishing exemptions from ENFIA

– abolishing gradually the excise duty on diesel for agricultural use

– an increase in income tax rate to farmers

More measures, though, will be applied with the new Medium-Term Plan (2016-2019) which will be submitted in Parliament in the upcoming days, whereas there are still some “unspecified” measures of at least 1 billion euros (and up to 3 billion euros) to be finalized and voted by the 2017-2018.

According to forecasts of the final draft of the new budget, almost all Greek citizens will burden with an additional amount of 883 million euros due to VAT hikes in many products and services.

Furthermore, more than two million businesses, freelancers, farmers and real estate owners will be called to pay additional taxes of 795 million euros due to increases in special levy solidarity rate, tax payment in advance and the main income tax.