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Athens News Agency: News in English, 09-12-19

Athens News Agency: News in English Directory - Previous Article - Next Article

From: The Athens News Agency at <http://www.ana.gr/>

CONTENTS

  • [01] Dialogue on tax reforms begins
  • [02] Greek Press Review

  • [01] Dialogue on tax reforms begins

    Greece's Finance Minister George Papaconstantinou on Friday announced the launch of dialogue on much-needed tax reforms, with the focus on curbing rampant tax evasion and broadening the tax base. The initiative came hard on news that the credit rating agency Standard and Poor's had downgraded Greece's credit rating from A- to BBB+.

    Standard and Poor's on Wednesday became the second credit-rating agency to cut Greece's ratings after Fitch, citing doubts that the measures announced by the new government would manage to rein in the country's rapidly escalating public debt.

    The first meeting of the dialogue coordinators will take place next Tuesday, following by a meeting on Wednesday by the various working groups. Public dialogue will take place concurrently and end in January, while the finalised draft bill is to be tabled in Parliament in early March.

    During a press conference on Friday, Papaconstantinou noted that tax revenues as a percentage of GDP were actually falling and were among the lowest in the European Union. Specifically, he noted that tax revenues came to 21.8 percent of GDP in 2001 and had fallen to 19.6 percent of GDP in 2004 and finally 19 percent of GDP in 2009.

    This was significantly lower than the equivalent amounts in the rest of Europe, where tax revenues came to 25 percent of GDP in the Eurozone and 26 percent of GDP in the EU.

    The minister underlined that, based on these figures, it was clear that public revenues could be and should be increased and the tax base broadened, since the largest proportion of taxes was currently paid by a very small percentage of tax-payers, mainly salaried employees with a middle income. Indicatively, salaried employees currently declared an average income of 14,400 euros a year, pensioners an average income of 11,800 euros a year, business owners 10,400 euros a year and free-lance professionals 9,000 euros a year.

    Papaconstantinou identified the main problems of the current taxation system as those of extensive tax evasion and tax avoidance, a taxation scale with limited progressiveness, a lack of inspection mechanisms, the lack of incentives for tax-payers to comply and disclose taxable income and finally, distortions caused by the taxation system itself, such as pointless tax exemptions, special taxation rates and other problems.

    He said that the government sought to establish a taxation system that was fair, redistributive, efficient, simple and transparent and that the changes would affect all categories of taxation and tax-payers.

    Among the envisaged changes he cited a more general use of statements indicating the source of income and assets by individuals, a uniform progressive tax scale linked to the Consumer Price Index for all incomes, different methods of taxing dividends and taxation of stock market gains.

    Potential changes for businesses will be requiring them to have a dedicated bank account linked to IT systems and to which tax services have access, as well as taxation of transactions with offshore companies.

    Concerning the taxation of real estate, Papaconstantinou announced plans to reintroduce inheritance taxes with a higher tax-free limit and the progressive taxation of large real estate holdings from 2010.

    The above will be combined with measures to boost the efficiency of tax office inspection mechanisms in order to combat tax evasion, including the firing of tax officials whose assets cannot be justified on the basis of their income and the assets they have declared in previously submitted statements of income and assets.

    Other measures will concern the electronic monitoring of the fuel market to stamp out contraband, introducing an IT cross-checking system and carrying out inspections and obliging business people and freelance professionals to publish their income and taxes on the Internet.

    Meeting with UK Chancellor of the Exchequer

    The Greek finance minister was back in Athens on Friday after visiting London on Thursday, where he met Chancellor of the Exchequer Alistair Darling and informed him of the measures that the Greek government intends to take in order to bring its public deficit and debt into line with EU requirements.

    His contacts in the British capital also included meetings with UK investors and some major media organizations, among them the Financial Times.

    Reporting on the results of these meetings, Papaconstantinou reported a lack of information abroad about what precisely is happening in Greece at this time and said the meeting had led to one of the few positive reports about the country that appeared on Thursday.

    He stressed that the government would continue to broadcast the message abroad that it was determined to carry out a deep-reaching and serious effort to tidy up Greeceās public finances.

    Asked how the government intended to deal with the budget deficit, he said measures will be taken to change the way in which the budget is drawn up.

    "We will begin from scratch to evaluate spending and we are carrying out a major tax reform. These are serious changes," he emphasized.

    Papaconstantinou told reporters on Friday that he was in constant communication with the credit-rating agency Moody's and others and would battle throughout 2010 to convince both foreign markets and Greece's European partners that Greece was on the right track.

    Based on the results of his three-day tour of European capitals and his talks with foreign institutional investors in Europe, the finance minister said that they appeared to have adopted a "wait-and-see" stance toward Greece, with all sides waiting to be convinced that there was a plan for exiting the crisis that was actually being carried out.

    He stressed that reversing this image in 2010 would determine whether the country was able to borrow at reasonable prices in order to service the public debt.

    [02] Greek Press Review

    The Saturday edition of Athens' dailies at a glance

    The sweeping reforms expected in the new taxation legislation and proposals by ruling PASOK for new Parliamentary probes into major scandals were the main front-page items in Athens' dailies on Saturday.

    ADESMEFTOS TYPOS: "The 13 new sector heads in New Democracy (ND) - and the supporters of Dora [Bakoyannis] among them".

    APOGEVMATINI: "Advance payment of Large Real Estate Property Tax - Necessity the mother of invention...for reducing the deficit."

    AVGHI: "Public sector wages slashed 10 percent".

    AVRIANI: "Greece an old jalopy cut into two. All governments criminally responsible for disgrace at Tempi".

    CHORA: "Diving into the abyss - unemployment, poverty, bankruptcy on the way".

    ELEFTHEROS: "[Parliamentary] investigation committees for four major scandals sought by 128 PASOK MPs with question [tabled in Parliament]".

    ELEFTHEROS TYPOS: "Taxes our holiday 'gift'. They are abandoning pre-election promises to lighten the load".

    ELEFTHEROTYPIA: "The burdens on shoulders of 30,000 euros and above. Tax bill: dialogue truncated. What the extra burdens are".

    ESTIA: "Frivolity over taxation matters - state of uncertainty extended".

    ETHNOS: "Raid with new taxes from now - dialogue on taxation bill to be held with summary proceedings".

    IMERISSIA: "39.6 percent ready to make sacrifices - citizens ready to take on responsibilities".

    KATHIMERINI: "On track for investigation committees - for the cases of the stock market, structured bonds, Vatopedi and Siemens".

    LOGOS: "Everything changing with the tax system".

    NIKI: "He's washing his hands - Archbishop refusing to take on his responsibilities".

    NAFTEMPORIKI: "What lies hidden in the package of new tax measures for 2010".

    RIZOSPASTIS: "Strike effort a landmark for contining the class struggle - PAME strike a great swollen river".

    STO KARFI: "Samaras in a vice - mutiny by Mitsotakis, tripped up by Karatzaferis".

    TA NEA: "German 'assistance' with the cut of an Irish 'suit' - Merkel umbrella on harsh terms".

    TO VIMA: "Taxes everywhere, here and now! Starting in January with fuel, drinks and cigarettes".

    VRADYNI: "Reduction of wages by 4 percent - in spite of assurances to the contrary, we are following in Ireland's footsteps".


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