In the wake of soaring inflation in Europe, Western government ministries reportedly agreed on a package of fiscal measures, including a cut in income tax for low – and middle-income earners earning less than €21,000 a year, and an extension of the working income deduction from €18,000 to €21,000.
The executive announced that it would increase the rate of personal income tax on savings income and decided to impose a “solidarity tax” on assets over 3 million euros in 2023 and 2024. The Treasury expects this to raise as much as $1.5 billion from 23,000 taxpayers. There will also be a temporary increase in corporate taxes for large conglomerates and tax breaks for the self-employed and small businesses. The measure could provide additional net benefits of 3.144 billion euros over the next two years, according to Finance ministry estimates.
In addition, the threshold for income tax will be raised to 15,000 euros, up from 14,000 euros today, saving taxpayers $1.881 billion. Between four and five million people could benefit from the personal income tax cut. The government stressed that for those who do not pay personal income tax and cannot benefit from this measure, the government will give other assistance in terms of expenditure, such as increasing the minimum income standard, minimum welfare standard.
The package also includes a reduction in VAT on women’s private hygiene products, such as tampons and pads, from 10 percent to 4 percent. This ultra-low rate will also be extended to condoms and non-medicinal contraceptives. The Treasury estimates that 956,000 self-employed people will benefit from the help.
Post time: Oct-09-2022