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Greece submits draft bill on tax relief measures
[ATHENS] Greece's coalition government submitted promised tax relief legislation to parliament on Thursday as part of efforts to boost its flagging popularity and show Greeks that four years of austerity are nearing an end.
Prime Minister Antonis Samaras, whose conservative party trails the anti-austerity Syriza party in opinion polls, has been trying to convince the country's EU/IMF lenders to roll back austerity measures and preserve fragile political stability ahead of a crucial presidential vote early next year.
The draft bill includes a promised 30 per cent cut in a special "solidarity tax", or levy on everyone earning more than 12,000 euros(S$19,357) a year. The tax, introduced at the height of the debt crisis, was supposed to end this year but has now been extended until the end of next year.
It also extends the 13 per cent value-added tax rate on eateries until the end of 2015 and sets a new installment scheme to help the gradual payment of billions of euros of arrears that households and businesses owe in taxes and to state pension funds. "Tackling private debt and offering gradual relief to taxpayers is a priority," the finance ministry said in a statement.
Under the bill, arrears of up to 15,000 euros can be paid in up to 100 installments, fines and surcharges on late payments will be cut, while overdue debts above 15,000 euros can be paid in 72 installments.
Debtors with arrears of up to one million euros will be allowed a maximum of two missed payments per year, after which they fall out of the scheme and will have to pay all the arrears owed in a lump sum. The interest rate charged on the overdue sums was also cut to 4.56 from 8.75 percent.
New arrears owed to the state hit 9.7 billion euros in the first nine months of this year, reflecting the difficulty austerity-hit Greeks have in paying taxes and social security contributions. Total arrears stand at about 90 billion euros but a big chunk is considered uncollectible.
Twice-bailed out Greece still has high debt but has managed to bring its public finances back on track, posting a budget surplus before interest payments last year, and the government hopes the country can exit its EU/IMF bailout at the end of this year.
After a six-year recession, which left more than one in four jobless, the economy is expected to grow this year, although only marginally.