The changes introduce a simplified tax system for sole proprietors whose revenue does not exceed EUR 50,000 per year, by waiving the obligation to keep records of expenses.

Instead, automatically deductible expenses of 70% of revenue will be introduced, meaning that just 30% of revenue will be taxed, at a rate of 20%.

The amendments are in line with similar changes to the corporate income tax act, which was adopted last week and applies to limited liability companies with revenue of less than EUR 50,000.

Another amendment designed to raise more revenue is a new system for charging tax on rental income, which has so far been progressive.

Notional expenses of 10% will be acknowledged and a flat 25% tax charged on the remaining 90%.

The government hopes the new system will bring more rental income into the formal economy by reducing taxes on property owners.

The changes also halve the tax credit for student work, which is certain to prompt protest by student organisations.