Greece formally scraps tax base expansion planned for 2020

In the last session of parliament ahead of early elections July 7, Greek lawmakers have approved a bill to scrap a legislated expansion of the tax base demanded by bailout creditors.

The law revoked Friday would have lowered the income tax-free threshold as of next year, thus increasing the number of Greeks who pay income tax.

It had been designed to increase state revenues by around a percentage point of Greece’s annual GDP, ensuring that the country would continue to post high budget surpluses to be able to repay its bailout debts.

Prime Minister Alexis Tsipras had already notified Greece’s European creditors of his plans to scrap the measure.

His government has insisted that the country will still be able to achieve its ambitious surplus targets.