The new bill, due in parliament this fall, will provide taxpayers with incentives to generate revenue from sectors that rank high on the tax evasion table.
Local media sources report that dozens of categories of self-employed professionals will be on the Finance Ministry’s list, in which taxpayers using cards or e-banking to transact will receive a generous discount on their income tax.
Ministry officials even say the discount will cover the amount of value added tax, which self-employed professionals often propose to reduce from the price in order to avoid issuing a receipt. Thus, the state will collect the due VAT, and the income will become legal, increasing the taxable income of professionals, who usually declare income below 10,000 euros per year.
The state will actually give up the VAT claims of taxpayers through a tax rebate and hopes to earn money on taxation of the declared income of the self-employed.
For the ministry plan, the list compiled by the secretariat of tax and tax policy includes, among others, the following professional categories: education, entertainment, medical services, auto repair shops, property repair services, hairdressers, travel services, small grocery stores, legal services, gyms, plumbing and all specialties related to construction.
Taxpayers will see the discounts they receive from the proceeds for the above services after they complete their tax return.
According to a study by the Foundation for Economic and Industrial Research (IOBE), there are dozens of professional sectors that have shown high rates of tax evasion and electronic transactions. While the share of services in private consumption in 2019 was 59.7%, their share in the value of card payments was only 31.3%.
The use of cards is especially low in areas such as education and renovation, as well as in catering.