Tax reform

Greece is a nation that is ageing demographically. A problem facing most developed countries. This fact is compounding the crisis-stricken nation, with more people retiring and less moving into the workforce to make up for the necessary pension funds to cover the retirees.

Greek civil servants are expected to stage a 24-hour strike on Wednesday to protest the bailout agreement, which was reached between the government in Athens and the eurozone leaders on Monday.

Greece agreed to implement strict reforms in return for a third bailout from its international creditors.

The Kosovo government is pushing for significant tax reform, aimed at stimulating investment, as well as lowering VAT on basic consumer goods, aimed at the helping the poor.

MPs in the assembly are due to vote on the changes on Thursday.

Greece: Prior Actions

Policy Commitments and Actions to be taken in consultation with EC/ECB/IMF staff:

1. 2015 supplementary budget and 2016-19 MTFS[1]

 VAT, sell-offs, corporate taxation, various exemptions and defense spending are principal sticking points

By Prokopis Hatzinikolaou & Sotiris Nikas

It could be said that the Greek government and creditors are splitting hairs with both sides proposals being similar but making a difference in the detail. The Greek text was leaked to Kathimerini.

Where are the differences?

– Creditors want Greece to yield 1% of the GDP from VAT but the Greek side can only squeeze 093%.

Bulgaria is a preferred destination for Italian citizens who wish to save money by going around local law and register abroad vehicles bought in Italy, local media outlets report.

Low taxes and affordable insurance in Bulgaria seem to be part of the explanation.

After agreeing to yield measures worth 8 bln euros, the government has set up a minefield of VAT increases. VAT increases to food items are particularly tricky with hidden details aimed at yielding 2 bln euros in 15 months!

Here are the government’s hidden tax shocks:

– 45% hike to VAT at Aegean islands

Under mounting pressure, Greece presented its new reform proposals to its Eurozone partners on Monday aimed at the release of 7.2 bn euros worth of bailout funds benchmarked for Greece. An agreement is needed to stave off a Greek default.

 Of the 7.9 bln euros of measures submitted, 7.3 bln concerns taxation and social security contributions

By Prokopis Hatzinikolaou & Sotiris Nikas