The provision stipulating progressive taxation from in line with the Personal Income Law will no longer be applicable as of 1 January 2023. Interest rates for term deposits will not be taxed, either. The Government lifted these provisions from the Personal Income Law that passed in Parliament.

Taxation of interest on term deposits is postponed until the country’s entry into the European Union, and the explanation from the Government is that in times of high inflation rates, it is important to encourage citizens to save.

According to the Government, the progressive tax rate, which was supposed to enter into force on January 1, opens several dilemmas, which is why this provision was abolished. The announcements are that analyzes will be made and other modalities will be considered for greater fairness in personal income taxation.