Gov’t makes plans to ease tax burden

 Creditors to oppose any relaxation of austerity policy even if it comes with offsetting measures

By Prokopis Hatzinikolaou

The Finance Ministry is drawing up a set of measures aimed at lightening tax debts and bringing an end to distortions in tax legislation, to be submitted for discussion with the country’s creditors in mid-July.

The heads of the creditors’ representatives will return then to check on the implementation of the prior actions and the budget before green-lighting the disbursement of the two sub-tranches due, which add up to 2 billion euros.

The government’s plan will likely meet with opposition from the creditors, even if it does find measures to offset the cost. The final decisions on the package of measures the government is to present will be made after the negotiations on the state debt and once the funding gap for 2015 has been closed.

That means there is much to do in the weeks ahead, given also that the responsible committees must submit their conclusions on the changes required in taxation, as well as their proposals for the restructuring of the debt and social security and labor issues reforms by the end of June.

Sources say that the government will tell the creditors that it wishes to reduce income tax and value-added tax rates, to provide incentives for the repatriation of capital, to gradually bring down the solidarity tax and to abolish the luxury tax on vehicles. Other proposals on the negotiating table will be bringing a halt to the use of assets for the calculation of income tax, given the operation of the electronic asset register, and the end of VAT on small enterprises.

On the issue of income tax, the government is planning to gradually reduce the rates for taxpayers, so that the highest...